Singapore: Gold was steady near a four-week low on Thursday, trading just below $1,300 an ounce, as stronger equities and data dimmed its safe-haven appeal, while investors weighed the possibility of a sooner-than-expected U.S. interest rate hike.
Fundamentals
Spot gold was little changed at $1,299.70 an ounce, after rising 0.4 per cent in the previous session, snapping a two-day decline. The metal fell to a four-week low of $1,291.70 earlier in the week. Gold has been under pressure after Federal Reserve Chair Janet Yellen said on Tuesday the U.S. central bank could raise rates earlier or faster if hiring and wages take off in an unexpected way.
Higher rates would encourage investors to withdraw money from non-interest-bearing assets such as gold. Strong US manufacturing and housing data on Wednesday also stoked fears that a strong economic recovery could prompt the Fed to act soon.
In a sign of waning investor sentiment, SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 2.7 tonnes to 806.03 tonnes on Wednesday. In other industry news, London Gold Market Fixing Ltd, the company operating the century-old global price benchmark known as the ‘fix’, said it is seeking a third party to take over administration of the process, possibly signalling a move to an electronic platform.
US precious metals dealer Anthem Vault Inc said it has launched the first digital currency backed by physical gold, with an aim to increase the use of bullion as an accepted form of electronic money.
