Gold prices fell to their lowest levels in more than three months on Friday, weighed down by growing evidence of accelerating U.S. economic growth, making a near-term interest rate hike more likely. Gold for June delivery settled down 0,3% at $1.216,70 a troy ounce on Comex, the metals division of the New York Mercantile Exchange, continuing an eight-session losing streak. It was the metal’s worst close since Feb. 22.
Gold is typically seen as a safe haven investment during periods of weak economic growth and financial market volatility. As a result, concerns about the health of the U.S. economy earlier in the year fueled the metal’s strong rally this year. However, more recent data suggests the slowdown was temporary, with data indicating that the U.S. recovery is continuing, albeit at a slower pace.
The economic data raises the possibility of the Fed raising interest rates, putting pressure on gold as it makes it less attractive relative to fixed-income assets. Fed Funds futures, which investors use to gauge the U.S. central bank’s monetary policy, give the probability of a rate hike in June nearly 34%, up from 4% at the start of the month, according to CME Group. The probability of a rate hike in July is 58%.
With speculative investment in the gold market at its most positive levels in nearly five years, analysts say the market could be headed for a sharp selloff as investors take profits and close positions. “The high level of speculative interest and the return of speculation on a U.S. interest rate hike make gold more susceptible to a price correction in the near term,” Commerzbank said in a note.
Gold prices were also pressured by a stronger dollar, which made the metal more expensive for buyers in other currencies. The euro was down 0,72% at $1,1124 earlier, while the dollar rose 0,46% against the Japanese currency to 110,268 yen. The pound lost 0,33% to $1,46178.
Valor Econômico - 27/05/2016
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