Gold prices fell, on Wednesday, from the barrier of 1,700 dollars an ounce, as the luster of the non-yielding precious metal waned due to expectations of sharp increases in interest rates from the US Federal Reserve. And gold fell in spot transactions 0.4 percent to $ 1694.60 an ounce by 1910 GMT, following it recorded in the previous session the largest drop in percentage terms for one day since July 14, driven by the rise of the dollar in the wake of a sudden increase in inflation in the United States . US gold futures fell 0.76 percent to $1,704.40 an ounce.
“Today we saw some selling pressure due to technical reasons following yesterday’s heavy losses,” said Jim Wyckoff, senior analyst at Kitco Metals. Markets are now calculating an increase of at least 75 basis points in interest rates from the US central bank at the conclusion of its monetary policy meeting next Wednesday, following an unexpected increase in the US consumer price index for August. “Tighter monetary policies will slow global economic growth, which in turn will reduce producer and consumer demand for (precious) metals,” Wyckoff said.
Gold is considered a hedge once morest inflation, but higher interest rates to tame price increases reduce investors’ appetite for the non-yielding yellow metal. Among the precious metals, silver rose in spot transactions 1.09 percent to $ 19.53 an ounce, while platinum jumped 2.7 percent to $ 902.43, and palladium rose 2.6 percent to $ 2158.60. (Archyde.com)
