Dollar knocks gold price below $1,200

Gold prices hit a nine-month low Wednesday as a resilient dollar extended its rally thanks to strong US economic data that further made a Federal Reserve interest-rate increase next month as certain as death and taxes.

The precious metal has lost about 10% from a peak it reached in the aftermath of the US election two weeks ago.

The precious metal fell 1.5% to $1,193.91 an ounce by 9:06 am ET, the first time since February that gold drops below the psychologically important $1,200 mark.

Futures, in turn, slid 1.5% to $1,192.80. The have dropped more than 6% since the US presidential election, and holdings in exchange-traded funds backed by the metal are heading for the biggest monthly decline in almost three years.

US durable goods orders rebounded in October and jobless claims, though off a 43-year low, remained below a level consistent with a tightening labour market. That pushed the dollar up into a fresh 13-1/2 year high.

The US Federal Reserve will announce in its Dec. 13-14 meeting whether, in fact, interests will go up. Higher interest rates raises the opportunity costs of holding gold as the metal provides no yield and any gains for investors is through price appreciation.

The precious metal has lost about 10% from a peak it reached in the aftermath of the US election two weeks ago.

Dollar knocks gold price below $1,200

Courtesy of Kitco.com

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