Tags: investors | gold fund holdings | federal reserve | rate bets

Investors Cut Gold Fund Holdings to Four-Month Low on Fed Bets

Tuesday, 02 Jun 2015 07:29 AM

Investors sold gold through bullion-backed funds for a fourth day, cutting holdings to a four-month low, on speculation the Federal Reserve is getting closer to raising interest rates. Gold prices were little changed.

Assets in exchange-traded products backed by the metal dropped 2.4 metric tons to 1,599.5 tons as of Monday, according to data compiled by Bloomberg. Holdings slipped 4.8 percent since late February and are at the lowest since Jan. 14.

The Bloomberg Dollar Spot Index reached a six-week high on Monday as U.S. manufacturing data added to evidence the economy can sustain a withdrawal in stimulus. Bullion prices declined the previous two weeks as the Fed said it’s looking to raise borrowing costs this year. Higher rates cut the allure of gold, which generally only provides returns through price gains.

“The Fed’s bias is towards tightening, and it will take something pretty spectacular to knock it off course,” Matthew Turner, an analyst at Macquarie Group Ltd., said by phone from London. “This has led to a slow and steady decline in ETF holdings in line with the decline in price.”

Gold for immediate delivery lost 0.1 percent to $1,188.43 an ounce by 11:32 a.m. in London, according to Bloomberg generic pricing. Bullion for August delivery was little changed at $1,188.40 on the Comex in New York, where futures trading volume was 20 percent below the 100-day average for the time of day.

U.S. policy makers have held interest rates near zero since 2008. Fed Chair Janet Yellen said last month that she expects rates to increase in 2015 as the economy picks up. Traders predict a 53 percent chance that the central bank will raise borrowing costs by the end of the year.

Silver for immediate delivery fell 0.3 percent to $16.7184 an ounce. Palladium added 0.2 percent to $775.53 an ounce. Platinum gained 0.7 percent to $1,111.16 an ounce, after dropping to $1,101.03, the lowest level since March 18. The metal is trading near its cheapest compared to gold since 2013.


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Investors sold gold through bullion-backed funds for a fourth day, cutting holdings to a four-month low, on speculation the Federal Reserve is getting closer to raising interest rates. Gold prices were little changed.Assets in exchange-traded products backed by the metal...
investors, gold fund holdings, federal reserve, rate bets
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2015-29-02
Tuesday, 02 Jun 2015 07:29 AM
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