Gold hits 3-1/2-month low on Fed hike fears, set for monthly loss
GLD•Gold fell to its lowest since mid-July and was down 3.8% for October, as stronger US economic growth, accelerating inflation and rising oil prices reinforced expectations of further interest rate hikes.
1. Gold extends losses
Spot gold was down 0.6% at $3,995.42 an ounce on Friday after reaching its lowest level since July 17. US gold futures for December delivery fell 0.6% to $4,005.50.
2. Rate hike expectations
US gross domestic product grew more than expected in the third quarter, while inflation accelerated in September. Traders were pricing in a near 74% chance of a rate hike in December. UBS analyst Giovanni Staunovo said stronger growth and higher oil prices were putting pressure on the Federal Reserve to raise rates further.
3. Other metals decline
Silver fell 2.8% to $50.9221 an ounce, platinum dropped 3.1% to $1,441.72 and palladium declined 2.1% to $984.50. All three were poised for weekly and monthly declines.
