Gold hovers near 5-year low, heads for worst week since October
Gold held near its lowest level since March 2010 early on Friday and was set to end the week posting its deepest loss in nine months, pressured by predictions of further losses as the Federal Reserve moves closer to raising interest rates.business Updated: Jul 24, 2015 11:22 IST
Gold held near its lowest level since March 2010 early on Friday and was set to end the week posting its deepest loss in nine months, pressured by predictions of further losses as the Federal Reserve moves closer to raising interest rates.
A drop in US weekly jobless claims to the lowest in more than four decades strengthened expectations of a US interest rate hike later in the year.
Spot gold was flat at $1,090.25 an ounce by 0042 GMT. Having tripped to a fresh five-year low of $1,086.61 on Thursday, gold has lost almost 4% for the week so far, its steepest since October 2014.
Bullion's rout deepened this week after sliding 3.3% on Monday, the most since September 2013, in a sell-off accompanied by big trading volumes in New York and Shanghai.
As the global bullion market continues to reel from Monday's dramatic price plunge, traders from Hong Kong to New York are pointing the finger at others for being behind the move while struggling to unmask the mystery sellers.
The number of Americans filing new applications for unemployment benefits last week dropped to its lowest level since November 1973, putting the Fed on course for its first rate hike in nearly a decade.
Some analysts say the Fed is likely to increase rates by September, and possibly follow with another hike in December, suggesting more downside risk for non-interest bearing gold.
Technically, gold will likely find a temporary ledge just below current levels, but could be on track to fall below $1,000 an ounce, a level last seen in 2009.
Holdings of SPDR Gold Trust, the world's biggest gold-backed exchange-traded fund, fell for a sixth day on Thursday to 22.01 million ounces, the lowest since August 2008.
US gold for August delivery slipped 0.4% to $1,089.40 an ounce.