Gold futures fell, posting the longest slump in seven weeks, as the dollars rally to a five-year high eroded the appeal of the precious metal as an alternative investment.
Futures approached a four-year low as the greenback climbed against a basket of 10 currencies after Japan expanded monetary stimulus, while the Federal Reserve moved closer closer to its first interest-rate increase in eight years.
On Oct. 31, gold capped a consecutive monthly decline, the first this year, after touching $1,160.50 an ounce, the lowest since July 2010. Higher interest rates reduce the metals allure because the commodity generally offers investors returns only through price gains, while a stronger dollar typically cuts demand for a store of value. Societe Generale SA and Goldman Sachs Group Inc. are among banks expecting further losses for gold.
Gold futures for December delivery dropped 0.2 percent to settle at $1,169.80 at 1:47 p.m. on the Comex in New York after touching $1,161. The metal declined for the fourth straight session, the longest slump since Sept. 12.
Source : Bloomberg