Gold futures fell on Monday as the U.S. dollar got a boost from growing expectations that the Federal Reserve will raise interest rates in December.
December gold GCZ5, -0.78% lost $6.70, or 0.6%, to $1,069.60 an ounce on Comex. Prices had finished last week with a 0.4% loss to tally their fifth straight weekly loss.
San Francisco Federal Reserve President John Williams on Saturday reiterated the case for raising interest rates in December. That provided a boost to the dollar and strength in the greenback can pressure prices for dollar-denominated commodities such as gold.
“With a rate hike still imminent next month and a ‘lower low’ printed on the chart last week, the path of least resistance [for gold]is still lower from here,” said analysts for The 7:00’s Report.
Meanwhile, hints of more stimulus in the eurozone from European Central Bank President Mario Draghi late last week also played a part in boosting the dollar and other rivals against the euro.
“[The] commodity rout continues (copper has gapped down), sending metals and oil lower as the U.S. dollar creeps north on expectations of euro-weakening ECB stimulus next week and a U.S. rate rise midmonth,” said Mike van Dulken, head of research at Accendo Markets, in a note Monday.
The dollar rebound was pressuring other metals across the board. December silver SIZ5, -0.36% lost 4.1 cents, or 0.3%, to $14.055 an ounce.
High-grade copper for December delivery HGZ5, -1.61% fell 3.3 cents, or 1.6%, to $2.022 a pound on Comex, continuing to trade at six-year lows. Meanwhile, the London Metal Exchange’s three-month copper contract on Monday fell below the key $4,500 a ton level for the first time since May 2009.
”[Copper prices] are down 27% so far this year as fears that slowing economic growth in China, weakening growth in the eurozone and oversupply all culminate in a selloff,” said Brenda Kelly, head analyst at London Capital Group, in a note.
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