Monday, 30 November 2015

Gold poised for worst monthly dip in 2-1/2 years

Gold was trading close to its lowest level in nearly six years on Monday and was poised to record its worst monthly slide in 2-1/2 years on prospects of a U.S. interest rate hike this year.


* Spot gold was little changed at $1,057 an ounce by 0028 GMT, after dropping 1.2 percent in the previous trading session. The metal was within striking distance of $1,052.46, the lowest since February 2010, reached on Friday.

* Bullion has lost about 7.5 percent of its value in November, its steepest monthly fall since June 2013.

* The precious metal has fallen out of favour as investors position themselves for the first U.S. rate hike in nearly a decade. The Federal Reserve is expected to raise rates at its next policy meeting in December.

* Investors believe gold, as a non-interest-paying asset, will take a hit to demand from higher rates as the dollar gains.

* The greenback is already trading near an eight-month high, and further strength could hurt dollar-denominated gold.

* Assets in SPDR Gold Trust, the world's top gold-backed exchange-traded fund, fell 0.14 percent to 654.80 tonnes on Friday, the lowest since September 2008.

* For trading cues this week, bullion traders would be focussed on the U.S. nonfarm payrolls report due on Friday. A strong jobs report could seal the case for a rate hike at Fed's Dec. 15-16 meeting.

* The European Central Bank policy meeting on Thursday will also be eyed for impact on the currency markets. The ECB is widely expected to ease policy.

* Elsewhere, gold miners in Australia, emboldened by a weakening currency, have been increasing production in the face of a global rout in the precious metal, figures released on Sunday showed.

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