Gold hits 3-1/2-month low on Fed hike fears, set for monthly loss
GLD•Gold fell 1% to $3,980.40 an ounce, its lowest since July 17, and was down 4.3% for October. Stronger-than-expected U.S. growth, accelerating inflation and rising oil prices reinforced expectations of interest rate hikes.
1. Gold extends monthly decline
Spot gold fell 1% to $3,980.40 per ounce by 1107 GMT after touching its lowest level since July 17. Bullion was on track for a 4.3% decline in October, its second straight monthly loss; December U.S. gold futures also fell 1%, to $3,991.10 per ounce.
2. Rate expectations weigh
A UBS analyst said stronger-than-expected U.S. GDP growth and higher oil prices were putting pressure on the Federal Reserve to raise rates further. Data showed U.S. inflation accelerated in September, bolstering economists’ expectations of a rate hike in December. The analyst said gold could climb to $5,000 or higher next year, when the Fed may have to cut rates again and inflation may no longer pose a problem. Silver, platinum and palladium also fell and were poised for weekly and monthly declines.
