TH: Calls grow to raise US rates as gold drops again
Gold dropped for a fourth session in five on Monday, drifting almost 1% below US$1,200 (RM4,400) an ounce as the dollar firmed after fresh comment from Federal Reserve officials that the central bank could look at raising US interest rates soon.
Fed official Jeffrey Lacker on Friday repeated his call for the US central bank to consider raising rates in June and said there is no shame in adjusting them lower again if economic data demands it.
Spot gold slipped 0.8% to $1,198.07 an ounce. Bullion climbed 1.1% on Friday after a break of technical resistance triggered automatic buy orders.
"Gold remains hostage to broader macro forces; the backdrop this year has been the timing of the Fed rate hike and underperformance of emerging markets," Macquarie analyst Matthew Turner said.
"The real issue for gold is that it is hanging around this $1,200 level... we are up towards the peak for the dollar that we saw earlier this year and are now waiting to see whether it carries on its rally or falls back. In the short term that sentiment is going to be important for gold."
Investors tend to shun gold when market expectations point to US interest rates rising.
The timing of the first US rate hike in nearly a decade remains the "key wildcard" for gold, said Barnabas Gan, analyst at OCBC Bank. – Reuters, April 13, 2015.
