Price of gold drops to near 6-year low

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Last week, gold prices slipped almost two per cent to a near six-year low. Experts say that this is due to pressure from a firm U.S. dollar and next month’s prospects of a Federal Reserve interest rate rise.

Spot gold hit US$1,052.46 an ounce—its lowest since February 2010. Moreover, spot prices were down 2.1 per cent for the week, with U.S. gold futures falling 1.3 per cent to $1,052.49 an ounce.

The Federal Reserve is also expected to raise U.S. rates for the first time in nearly a decade next month. These higher rates would raise the opportunity cost of holding non-yielding gold, diminishing demand and boosting the dollar.

“The omens are not positive for gold in the lead-up to the December rate meeting,” says Societe Generale analyst Robin Bhar. CJ

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