Sunday 22 October 2017

Gold falls to lowest level in six months

Gold has fallen to its lowest level in six months
Gold has fallen to its lowest level in six months

Jan Harvey

GOLD slid more than 1pc yesterday to its lowest since late June after the US Federal Reserve took its first step away from the ultra-loose monetary policy that had helped drive bullion prices to record highs in recent years.

The Fed said that the US economy was finally strong enough for it to start scaling back its massive bond-buying scheme, winding down the era of easy money that saw gold rally to $1,920.30 (€1,404.82) an ounce in 2011.

Spot gold was down 1.2pc at $1,202.10 an ounce yesterday morning, having earlier touched a low of $1,200.25.

US gold futures for February delivery were down $32.90 an ounce at $1,202.10.

That move came despite the Federal Reserve blunting its taper with a continued dovish message on interest rates -- that tapering was not tightening.

"This is another sign of increasing normalisation for the world economy," said Macquarie analyst Matthew Turner. "Gold's insurance function is less desirable in that environment."

The precious metal could extend losses sharply if it breaks support at $1,200 an ounce, a key psychological level.

Irish Independent

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