Gold price under pressure ahead of Fed decision

London (Dec 1)  Gold has witnessed its sharpest monthly fall in two and a half years amid concerns the US Federal Reserve will raise interest rates before the end of the year.

The precious metal fell more than 6 per cent to $1,068.91 per ounce – its biggest monthly decline since June 2013.

The sell-off comes in anticipation of the Fed’s next FOMC meeting, scheduled for the middle of this month, which has also seen the dollar climbing in recent weeks.

According to Reuters, the dollar reached a near-13 year high this week against a basket of currencies.

The newswire reports that SPDR Gold Trust, the world’s leading exchange-traded fund, had its lowest levels of assets under management since 2008.

Further, even during the current peak shopping season, US jewellery imports rose 85 per cent for platinum but only 12 per cent for gold.

Analysts have more than doubled the likelihood of a rate rise this month, which is now cast as more than 70 per cent compared to 35 per cent around a month ago.

Source: FundStrategy