Gold futures fell for the fifth time in six sessions as the dollar strengthened amid signs of an improving U.S. economic outlook, diminishing demand for the metal as a store of value.
The Bloomberg Dollar Index rebounded from the weakest since October. Traders are pricing in a 52 percent chance that the Federal Reserve will raise rates by June, up from 6 percent a month ago, according to Fed fund futures data compiled by Bloomberg. Higher rates hurt demand for gold, which becomes less competitive against interest-bearing assets.
Bullion has risen 17 percent this year as concerns that a slowdown on China would spread globally boosted the metal’s appeal as a haven. Traders are reassessing Fed rate expectations amid improvements in hiring and manufacturing in the U.S. Citigroup Inc.’s Economic Surprise Index, which measures data performance relative to market expectations, rose to the highest in almost four months.
Gold futures for April delivery slid 1.1 percent to settle at $1,245.10 an ounce at 1:41 p.m. on the Comex in New York. Prices fell for a third straight year in 2015, as investors awaited the first increase in borrowing costs in almost a decade, which came in December.
Source : Bloomberg