Gold trades near 3-month low on Fed’s rate hike speculations

Economies.com
2015-03-09 18:50PM UTC

The precious metal traded near its lowest level in three months, as speculations the Fed may raise interest rate earlier than expected dented the appeal of the metal.

 

Gold experienced its biggest single-day fall since December 2013 on Friday after the U.S. non-farm payrolls report came better than analysts’ estimates.

 

The jobs report showed that American employers added 295,000 jobs in February, coming above analysts’ forecast of 240,000, while unemployment fell below projections of 5.6 percent to 5.5 percent. 

 

The remarkable progress in the U.S. labor market has raised expectations of seeing an interest rate hike in June, instead of at the end of the year. 

 

Despite the upgrade in inflation forecasts for the euro area by the ECB last week and the beginning of the bank’s QE program today, the shiny metal remained vulnerable, surrendering to the pressure of the strong dollar.

 

The dollar index, which tracks the green currency’s movements versus a basket of major currencies, dropped slightly on Monday, yet remains near its highest level in more than 11 years around 97.58. 

 

The yellow metal fell from a high of $1175.19 an ounce to trade around $1167.53, while the lowest point was touched at $1166.83.

 

Gold lost 3.85 percent the previous week, where the breakout of the psychological level of $1200 triggered the sell off.

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