November 30, 2016 / 3:01 AM / a year ago

PRECIOUS-Gold on track for worst month since June 2013 on looming rate hike

* Gold down nearly 7 pct in November
    * Palladium off 1-1/2-year highs hit Tuesday
    * Palladium has risen over 23 pct so far this month

 (Updates prices, adds comment)
    By Sethuraman N R
    Nov 30 (Reuters) - Gold was on track for its biggest monthly
decline since June 2013, largely pressured by an imminent U.S.
interest rate hike by the Federal Reserve in December on
expectations of improving economic growth.
    Spot gold on Wednesday was nearly unchanged at
$1,188.86 an ounce by 0627 GMT. U.S. gold futures were
flat at $1,187.90 per ounce. Spot gold was down 6.83 percent so
far this month.
    Bullion has lost $150 from a Nov. 9 post U.S. election high
of $1,337.40 per ounce, hurt by a rally in the U.S. dollar on
surging Treasury yields as investors believed President-elect
Donald Trump's policies would invoke faster inflation.
    "Markets seem to accept Trump as good for business," said
Joshua Rotbart, managing partner at Hong Kong-based bullion
services provider J. Rotbart & Co. 
    "His statements about increasing investments in
infrastructure, tax reform aimed at strengthening local
businesses and import reforms to prioritize local businesses
have increased growth expectations," he added.
    "This has triggered a risk-on trend which has seen cash
flows from gold-backed securities to risky assets like
    The dollar on Wednesday edged up as U.S. debt yields resumed
    The U.S. economy grew faster than initially estimated in the
third quarter, notching up its best performance in two years,
buoyed by strong consumer spending and a surge in soybean
    The case for raising U.S. interest rates has "clearly
strengthened" since early November, before Americans elected
Republican Donald Trump as president, Federal Reserve governor
Jerome Powell said on Tuesday in the latest signal that a policy
tightening is imminent. 
    Gold is highly sensitive to rising rates, which lift the
opportunity cost of holding non-yielding assets such as bullion,
while boosting the dollar, in which it is priced.
    Oil markets were jittery on Wednesday ahead of an OPEC
meeting later in the day, with members of the producer cartel
trying to thrash out an output cut to curb oversupply. 
    "The impact of an OPEC deal on gold would be tricky to
assess," said Edward Meir, an analyst with INTL FCStone.
    "A failure by OPEC to agree on a credible cut will send oil
prices sharply lower and possibly drag gold down with it.
However, we could see the dollar weaken as a result of oil
selling off and this could boost gold," Meir said.
    Silver rose 0.6 percent to $16.67 an ounce.
    Platinum was up 0.2 percent at $919.60.
    Palladium edged up 0.1 percent to $760.70 It rose to
a 1-1/2-year high of $766.20 on Tuesday. Palladium has risen
over 23 percent this month, its best since February 2008,
outperforming other metals. 

 (Reporting by Nallur Sethuraman and Apeksha Nair in Bengaluru;
Editing by Joseph Radford and Richard Pullin)
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below