Gold drops to a Two-Month Low

Gold drops to a Two-Month Low

Currently prevailing high U. S. interest rates have strengthened the dollar and this in turn has caused gold to decline to a two-month low in the longest run of declines since June, in London.

On the similar grounds, platinum too headed for the longest run of losses since the past 27 years. Silver also dropped and reached $19.31, the lowest since June 12.

According to Bloomberg generic pricing, gold dropped 0.8% to $1,281 an ounce by 9:40 a. m. in London. It eventually settled down to $1,278.4, which is the lowest since June 19. At a stretch, this would be the fifth day of loss and would be the longest such run since June 2.

Tom Kendall, an analyst at Credit Suisse Group AG in London said, "Any hint that there'll be more definitive action coming from the Fed is not going to be bullish for gold. The market is still highly sensitive to expectations of what the Fed will do and when. The physical market is still extremely quiet".

A meeting of central bankers in Jackson Hole, Wyoming, will be held tomorrow. Fed Chair, Janet Yellen, is expected to deliver a speech there in which she will provide her take on the latest data of the labor market.

Gold prices have slid by 28% since last year because of the expectations that the U. S. stimulus would be reduced as the economy strengthens on the whole. This year because of the unrest in Ukraine and the Middle East the prices of gold rose partly by 6.6%. The rise was due to the fact that gold is considered as a safe investment option at the time of uncertainties.

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