Gold price dips under $1,100, eyes third straight weekly loss

San Francisco (Sept 11)  Gold futures dipped under $1,100 an ounce on Friday and looked to mark a third straight weekly loss as investors awaited the Federal Reserve’s key decision on rates next week.

Gold futures for December delivery GCZ5, -0.59%  gave up $9.60, or 0.9%, to trade at $1,099.70 an ounce on Comex, and was eyeing a weekly loss of 1.9%. That would mark gold’s third straight weekly loss dating back to the week ended Aug. 28.

The Fed’s two-day policy meeting, starting Sept. 16, may set the tempo for gold’s moves, at least in the short term. The outcome of the Fed’s monetary-policy meeting appears uncertain as the central bank weighs lifting rates for the first time in almost a decade.

A rate increase would tend to push the U.S. dollar higher but that could put pressure on the price of dollar-denominated commodities like gold, making it more expensive to buyers in other currencies.

“Fears over China’s fast-weakening data are adding to the pressure ahead of next week’s U.S. rate decision,” Adrian Ash, head of research at BullionVault, told MarketWatch in an email.

But “if the Fed does raise, it will at least remove that threat from gold by becoming fact,” he said. “The growing consensus amongst bullion analysts is that Fed lift-off should mark an important near-term low for gold, kick-starting a relief rally.”

In his report Friday, Ash offered an interesting chart to show how gold has historically reacted to Fed rate-hiking cycles:

The table tracks gold’s percentage price-change over the three months before each hiking cycle begins, over the first three months after it starts, and over each cycle’s first 12 months, with average outcomes at the bottom, plus the average data for the entire period since 1970, said Ash.

In other metals, December silver SIZ5, -1.74% lost 35.5 cents, or 2.4%, to $14.29 an ounce, on track for a weekly loss of 1.8%. December copper HGZ5, -0.06%  traded at $2.442 a pound, down about half a cent, or 0.3%. It was up more than 5% for the week.

October platinum PLV5, -1.36%  fell $15.90, or 1.6%, to $965.30 an ounce, set for a weekly loss of about 2.7%, while December palladium PAZ5, -2.02%  lost $13.60, or 2.3%, to $578.90 an ounce, set for a weekly gain of roughly 0.3%.

Source: MarketWatch