Gold extends losses to near 5-1/2 year lows

Platinum fell to its lowest level since February 2009 at Dollars 940.50, marking a 6-and-a-half-year low while palladium hit a near three-year-low of USD 586.33 per ounce.


GOLD has dropped, after falling by the most in two years in July, as the dollar rose and investors monitored US economic indicators for clues on the timing of a hike in US interest rates.

GOLD BULLION held in a tight $4 range either side of $1093 per ounce in London on Monday, trading sideways as industrial metals sank to new 6-year lows following the weakest Chinese manufacturing data in two years.

After a brutal July, gold futures started the week and the month of August on a dour note, with the precious metal is being weighed down by a stronger dollar ahead of a key employment report on Friday, which could set the tempo for the Federal Reserve’s first interest rate hike since 2006.

“The dollar is back on the ascendant today, weighing on all commodity prices”, Mitsubishi Corp analyst Jonathan Butler said. But being above 50 shows the U.S. manufacturing sector continues to expand. The next main data event is the release of US non-farm payrolls on Friday.

“It is hard for gold in this environment where the outlook is for rising U.S. rates… we still remain bearish on the metal, we still see some downside and we wouldn’t recommend investors entering this market”, Julius Baer commodity analyst Warren Kreyzig said. “The more nervousness created about a September rate hike, the worse it is for gold so that took the market as we go into the close”, said Bill O’Neill, co-founder of commodities investment firm LOGIC Advisors in New Jersey. In other precious metals, spot silver was up 0.7 per cent at $US14.75 an ounce.

Hedge funds and money managers kept their first bearish stance in COMEX gold in at least a decade during the week ended July 28, suggesting the recent mass exodus from bullion was more than a knee-jerk reaction.


Amid waning interest in bullion, holdings in SPDR Gold Trust (GLD), the world’s largest gold-backed exchange-traded fund, dropped to 21.63 million ounces on Friday, the lowest since September 2008. Spot platinum dropped 1.1 percent to $970.99 an ounce, after posting the biggest monthly fall in ten months at 8.7 percent in July. Palladium lost 2.3 per cent to $US595.25 an ounce, nearing the lowest since October 2012.

Gold struggles after worst month in two years