Gold falls as US rate hike woes surface

Singapore (Dec 15)  Gold retreated on Monday, after posting its biggest weekly gain in two months, amid expectations the U.S. Federal Reserve is moving closer to raising interest rates.

The Fed holds a policy meeting this week and a recent spate of data that points to a strengthening economy could sharpen the case for the central bank to take a more hawkish stance.

The latest upbeat evidence came on Friday when the Thomson Reuters/University of Michigan index of consumer sentiment jumped to a near 8-year high in December.
Spot gold was down 0.3 percent at $1,218.80 an ounce by 0638 GMT. The metal climbed 2.6 percent last week, its largest such rise since October.

A hike in U.S. interest rates curbs appeal of non-interest bearing assets such as gold.

Investors were also cashing in recent gains after gold failed to convincingly breach the $1,235 key resistance level, said Lee.

U.S. gold for February delivery slipped 0.3 percent to $1,219.30 an ounce.

Source: EconomicTimes-in