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Gold down on strong US dollar

 2015-11-27 20:35:24.0

Gold Chicago: �Gold futures on the COMEX division of the New York Mercantile Exchange fell on Friday as a stronger US dollar put pressure on the precious metal during a period of no news due to the combination of Thanksgiving holiday and the early market close on Friday. The most active gold contract for February delivery lost $13.5, or 1.26 percent, to settle at $1,056.2 per ounce, Xinhua news agency reported. Gold fell as the dollar rose to an eight-month high on Friday, putting pressure on the metal. The US dollar Index rose by 0.20 to 100.07 as of 17.00 GMT. The index is a measure of the dollar against a basket of major currencies. Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, measured by the dollar, becomes more expensive for investors. Analysts note that gold is near its six-year low point. The precious metal was put under further pressure as a report released on Friday by the Hong Kong Census and Statistics Department showed net gold imports to China from Hong Kong falling to 71.581 tonnes in October from a 10-month-high of 97.242 tonnes in September. Analysts believe that this decreased physical demand, coupled with the expectation for a Fed rate increase makes the long-term outlook for gold bulls look very bleak. The current chances for the US central bank to raise interest rates at their December 15 Federal Open Market Committee (FOMC) meeting remains at at an implied probability at 78 percent, according to the CMEGroup's Fedwatch tool, which is based on 30-day Fed Fund futures prices. Expectations were originally for a delay in the rate hike until 2016 but the FOMC meeting in late October confirmed that the Fed wants to raise rates before the end of 2015. An increase in the Fed's interest rate drives investors away from gold and towards assets with a return, as the precious metal bears no interest. There has not been an increase in the Fed's interest rate since June 2006, before the beginning of the American financial crisis. Analysts believe that the Fed rate hike has still not yet been fully priced in, and continued global geopolitical conflict is still artificially propping up the precious metal. Silver for March delivery fell 12.7 cents, or 0.90 percent, to close at $14.048 per ounce. Platinum for January delivery dropped $8.1, or 0.96 percent, to close at $835.8 per ounce. (IANS)

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