Gold Drops to 5-Year Low as Fed Minutes Show December Potential

  • Platinum futures decline to lowest since December 2008
  • Fed `setting the stage' for `blast off' on rates: Cordier

Price for Gold Is at a Five-Year Low

Gold traded near a five-year low after minutes from the Federal Reserve’s last meeting reinforced that policy makers could raise U.S. interest rates next month. Platinum fell to the lowest since 2008.

The central bank on Wednesday released minutes from the Oct. 27-28 meeting that showed policy makers inserted language into their October statement to stress that it may be appropriate to increase interest rates in December. Gold has declined almost 10 percent this year on the outlook for higher rates, which curb the metal’s appeal because it doesn’t pay interest.

“They’re setting the stage, preparing everyone for the quarter-point blast off,” James Cordier, the founder of in Tampa, Florida, said in a telephone interview before the minutes were released.

Gold for immediate delivery added 0.1 percent to $1,071.38 an ounce at 3:16 p.m. New York time, after touching $1,064.55, the lowest in five years.

The benchmark 30-member Philadelphia Stock Exchange Gold and Silver Index, which includes Barrick Gold Corp. and Newmont Mining Corp., has dropped 35 percent this year as lower metal prices cut the outlook for producer profits.

Platinum futures for January delivery fell 0.8 percent to $848 an ounce on the New York Mercantile Exchange, after touching $846.10, the lowest since December 2008. Palladium futures for December delivery dropped 2.6 percent to $532.05 an ounce.

“Another desultory day for the precious-metals complex, with gold and platinum prices making multi-year lows,” David Govett, head of precious metals at broker Marex Spectron Group in London, said by e-mail. “Not only is there virtually zero interest in precious from an investment standpoint, the pressure on commodities as a whole is ensuring that prices remain very weak despite these low levels.”

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