Gold Slides Below $1,200 in Longest Losing Run Since October

Updated on
  • Bullion declines as investors reassess outlook for U.S. rates
  • Investors awaiting non-farm payrolls data for guide on policy

Linn Group’s Epstein Says Gold Is Not Looking Bullish

Gold dipped below $1,200 an ounce in its longest losing run since October as positive U.S. economic figures reinforce expectations that yields on other investments will rise this year.

Bullion for immediate delivery fell as much as 0.3 percent to $1,197.70, the lowest since Jan. 31, and was at $1,198.57 at 9:22 a.m. in Singapore, according to Bloomberg generic pricing. The metal is down 2.9 percent this week after dropping on all five days as yields on 10-year Treasurys extended gains, making non-interest bearing assets less attractive.

The precious metal has been hit by Federal Reserve officials including Chair Janet Yellen talking up the prospect of higher rates this month. Better-than-expected U.S. private jobs data this week also boosted the dollar before official payrolls figures on Friday, which is the last major piece of economic news before the Fed meets next week. The European Central Bank, meanwhile, signaled it won’t add to stimulus as growth picks up.

“If the data continues to be as good as it was, or improves, we could see the Fed move toward further hawkishness," said Brad Yates, head of trading for Elemetal, one of the biggest U.S. gold refiners. “That could hurt gold.”

After the Fed raised rates once in 2015 and again in 2016, the pace may quicken this year. The so-called dot plot illustrating policy makers’ projections suggests three increases this year. While economists see U.S. non-farm payrolls declining, possibly supporting gold, their projections have underestimated employment growth in February for five years in a row.

In other precious metals:

  • Spot silver is down 5.8 percent this week, heading for the biggest decline since the five days ended Oct. 7.
  • Palladium fell 3.7 percent this week, while platinum slumped 6.3 percent, the most since November 2015.
  • The World Platinum Investment Council raised its 2017 platinum supply deficit to 120,000 ounces from 100,000 ounces on a resilient car market. The metal is used in auto-catalysts that help remove pollutants from vehicle exhaust.

— With assistance by Austin Weinstein, and Yuliya Fedorinova

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