Gold Falls to Three-Month Low Amid Dollar Strength

San Francisco (Sept 9) Gold fell to a three-month low in New York as strength in the U.S. dollar reduced demand for the metal as an alternative investment.

The Bloomberg Dollar Spot index, which tracks the greenback against 10 peers, climbed to the highest in 14 months amid speculation that economic reports this week will back the case for the Federal Reserve to boost interest rates next year. A report today showed U.S. job openings held close to a more-than a 13-year high in July.

“The dollar strength is working against gold,” Frank Lesh, a trader at FuturePath Trading LLC in Chicago, said in a telephone interview. “Worries about higher interest rate are keeping buyers away.”

Gold futures for December delivery fell 0.3 percent to $1,250.70 an ounce at 12:15 p.m. on the Comex in New York after touching $1,248.50, the lowest for a most-active contract since June 6. Trading was 11 percent below the average for the past 100 days for this time, data compiled by Bloomberg show.

The precious metal lost 5.1 percent this quarter through yesterday on concern that the Fed will raise interest rates as the economy gains traction. Policy makers will meet Sept. 16-17.

Holdings in gold-backed exchange-traded products declined in the past two weeks, data compiled by Bloomberg show.

Silver futures for December delivery declined 0.1 percent to $18.935 an ounce on the Comex.

On the New York Mercantile Exchange, platinum futures for October delivery retreated 0.9 percent to $1,385 an ounce after touching $1,383.30, the lowest since Feb. 11.

Palladium futures for December delivery slipped 2.5 percent to $864 an ounce.

Source: Bloomberg