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Gold set for longest run of quarterly losses since 1997

 

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Gold set for longest run of quarterly losses since 1997
Gold fell for a fourth day on Wednesday after US consumer confidence unexpectedly rose.

Singapore - Fed-fund futures show a 16 per cent chance of a 25 basis point increase next month, while the probability is 43 per cent by December.

By Bloomberg

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Published: Thu 1 Oct 2015, 12:00 AM

Last updated: Thu 1 Oct 2015, 9:17 AM

Gold fell for a fourth day after US consumer confidence unexpectedly rose, building the case for an interest rate increase this year. The metal is set for a fifth quarterly drop, its longest losing streak since 1997.
Bullion for immediate delivery fell as much as 0.5 per cent to $1,122.20 an ounce, the lowest in a week, and traded at $1,123.20 by 11:50am in London, according to Bloomberg generic pricing.
While higher consumer confidence this month helped US stocks erase losses, investors are wrestling with the possibility market volatility, concern over the depth of China's slowdown and slumping commodity prices will keep the Federal Open Market Committee from raising rates. Higher rates curb gold's appeal as the metal doesn't pay interest.
"We're now approaching the October FOMC and we can expect that the market watchers will be eyeing very closely what the Fed is going to say," Barnabas Gan, an economist at Oversea Chinese Banking Corp, said by phone in Singapore.
"There are two possibilities - one in October, one in December. Whether they hike on either of the months, our house view is that we are still looking for at least one hike. That would be negative for gold."
Fed-fund futures show a 16 per cent chance of a 25 basis point increase next month, while the probability is 43 per cent by December, based on data compiled by Bloomberg. Holdings in exchange-traded funds backed by gold increased for a fifth straight day as of Monday, data compiled by Bloomberg show.


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