Gold price heads for biggest quarterly loss in a year
London (Sept 30) Gold eased on Wednesday, staying on track for its biggest quarterly loss in a year as the dollar strengthened and the market awaited clarity on the timing of a hotly anticipated U.S. interest rate rise.
Platinum regained some ground after plunging to its lowest since December 2008 the previous day, but remained set for its biggest quarterly loss in seven years on fears of a demand fallout from the Volkswagen emissions scandal.
Gold has fallen 4 percent since July in a fifth successive quarter of losses, its longest quarterly run lower since 1997.
Spot gold was down 0.4 percent at $1,122.90 an ounce at 0930 GMT, while U.S. gold futures for December delivery were down $4.90 an ounce at $1,121.90.
The metal has come under pressure from expectations that the U.S. Federal Reserve is on track to hike interest rates this year, potentially lifting the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced.
"(The drop) is mostly related to investors staying on the sidelines, waiting for the rate hike to happen so it is out of the way," Capital Economics analyst Simona Gambarini said. "It's not the best time to get into the gold market, when you know there will be a rate hike."
Traders will be eyeing a speech by Fed Chair Janet Yellen later on Wednesday and a private employment report for clues about the economy and timing of a rate hike.
Spot platinum was up 0.7 percent at $919.74 an ounce, but has fallen nearly 15 percent on the quarter.
The metal was hit last week by news of Volkswagen's falsification of U.S. vehicle emission tests, which some believe could affect demand for diesel cars. Platinum is widely used in emissions-controlling automotive catalytic converters, particularly for diesel engines.
The market is also suffering from a dearth of platinum jewellery buying in China, and from rising supply from South African producers, who are ramping up output after last year's unprecedented five-month strike.
"On the supply side there is plenty of metal in the market because producers are having to sell as much as possible to rebuild their balance sheets after last year," Mitsubishi analyst Jonathan Butler said. "In the short term at least, the condition of oversupply in platinum is likely to prevail."
Palladium has gained as investors believe demand for gasoline-powered cars could increase. The metal is set to log its best month since July 2013, up 10 percent, though it was still headed for a narrow quarterly loss.
Spot palladium was up 1.1 percent at $660.75, while silver was up 0.1 percent at $14.63 an ounce.
Source: Reuters
