- Chance of December rate increase seen climbing to 45 percent
- Standard & Poor's 500 Index extending its best week of 2016
Gold futures had the first decline in four sessions as global equities and crude oil rallied, eroding demand for the metal as a haven.
Stocks around the world advanced, with the Standard & Poor’s 500 Index extending its best week of 2016 and Dubai shares entering a bull market. Crude oil rebounded amid speculation some OPEC members could eventually help ease the global glut. The Bloomberg Dollar Spot Index headed for the biggest gain in a week.
Before Monday’s decline, gold rallied 16 percent this year on the outlook for weakness in world economies and sliding commodity prices. Investors have piled into gold as speculation mounted that the Federal Reserve will delay further interest-rate increases, fueling demand for bullion as a store of value. Now, traders are starting to rebuild bets on higher interest rates this year amid signs that an improving economy may finally be allowing U.S. companies to charge more.
“Things aren’t looking as bad to some of these investors, so they’re exiting their gold positions,” Michael Smith, the president of T&K Futures & Options in Port St. Lucie, Florida, said in a telephone interview. “You’ve got stocks and oil up, and the dollar index is also up. Put those three together, and that’s going to be bearish for gold.”
Gold futures for April delivery slipped 1.7 percent to settle at $1,210.10 an ounce on the Comex in New York. The metal gained 1.9 percent in the previous three sessions.
On Monday, the odds of an increase in U.S. rates at the December meeting by the Federal Reserve were at 45 percent, up from 30 percent two weeks ago, Fed fund futures data show.
- The MSCI All-Country World Index climbed 1.3 percent, while West Texas Intermediate surged 7 percent to $31.70 a barrel in New York. The Bloomberg Commodity Index gained 1.3 percent, as four of the six major industrial metals traded in London rose.
- Silver futures declined on the Comex. Platinum and palladium fell on the New York Mercantile Exchange.