Fed fusillade sends gold to $100 loss this month

Bloomberg

Gold’s on the ropes. Bullion broke below $1,200 an ounce on Monday after losing more than $100 in less than a month as Federal Reserve policy makers land punch after punch by talking up the prospects for a U.S. interest rate rise and reinvigorating the dollar.
Bullion for immediate delivery lost as much as 1 percent to $1,199.80 an ounce, the lowest level since Feb. 17, and traded at $1,203.50 in Singapore, according to Bloomberg generic pricing.
With many traders in Britain and the U.S. away from their desks for holidays, prices that peaked at a 15-month high of $1,303.82 on May 2 are down for the ninth straight day.
The precious metal is headed for the biggest monthly decline since June 2013 after Fed Chairman Janet Yellen affirmed in comments on Friday what a procession of her officials said earlier last week: that evidence of strength in the U.S. economy meant tighter policy can now be considered.
UBS Group AG warned on Thursday that gold is “going to roll over” as the Fed hikes twice before the end of the year. Holdings in exchange-traded products were slightly lower last week after expanding for four straight weeks.
“The key risk for me now is not whether they will hike once, but actually whether they will hike twice: as a house, we believe they will hike twice in September and December,” Wayne Gordon, executive director for commodities and forex at UBS Wealth Management, said in an interview in Singapore on Monday.
“For me, it’s all about the data that’s coming in.”
The drop has cut bullion’s gain in 2016 to 13 percent from more than 20 percent at the start of the month as Fed officials have fleshed out the case for higher borrowing costs.
Before Yellen’s remarks, officials including the presidents of the bank’s regional arms in San Francisco, Boston and Philadelphia all spoke in support of higher rates.