Bullion erased this year’s gains earlier this month as signs of an improving U.S. economy added to the case for higher borrowing costs. Rising interest rates reduce gold’s allure because the metal generally only offers investors returns through price gains, while a stronger dollar typically cuts demand for a store of value.
“With uncertainty about the timing of the Fed’s rate hike now starting to show, we feel that equities and the dollar would continue on the defensive, which would then underpin gold,” Abhishek Chinchalkar, an analyst at Mumbai-based AnandRathi Commodities Ltd., said in a report today. “Gains could be capped around $1,250 an ounce if crude continues under pressure.”
Gold for December delivery added 0.5 percent to $1,236.10 an ounce by 7:36 a.m. on the Comex in New York. It reached $1,238 yesterday, the highest since Sept. 17. Gold for immediate delivery was little changed at $1,235.81
“With uncertainty about the timing of the Fed’s rate hike now starting to show, we feel that equities and the dollar would continue on the defensive, which would then underpin gold,” Abhishek Chinchalkar, an analyst at Mumbai-based AnandRathi Commodities Ltd., said in a report today. “Gains could be capped around $1,250 an ounce if crude continues under pressure.”
Gold for December delivery added 0.5 percent to $1,236.10 an ounce by 7:36 a.m. on the Comex in New York. It reached $1,238 yesterday, the highest since Sept. 17. Gold for immediate delivery was little changed at $1,235.81
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