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PRECIOUS-Gold skids to 8-1/2 month low on U.S. rate hike fears
September 18, 2014 / 12:51 AM / 3 years ago

PRECIOUS-Gold skids to 8-1/2 month low on U.S. rate hike fears

SINGAPORE, Sept 18 (Reuters) - Gold tumbled to its lowest in
8-1/2 months on Thursday as the dollar index traded near a
four-year peak after the Federal Reserve signalled that a faster
hike in U.S. interest rates might be on the horizon.
        
    FUNDAMENTALS
    * Spot gold fell to $1,216.01 an ounce early on
Thursday, its lowest since Jan. 2, before paring some losses to
trade at $1,222.26 by 0038 GMT. The metal lost nearly 1 percent
the day before.
    * U.S. gold slid 1 percent to $1,223.20 on Thursday,
tracking losses in spot gold.
    * The Fed on Wednesday renewed its pledge to keep interest
rates near zero for a "considerable time", but also indicated it
could raise borrowing costs faster than expected when it starts
moving.  
    * In a statement after a two-day meeting of its
policy-setting Federal Open Market Committee, it also announced
a further $10 billion reduction in its monthly purchases,
leaving the programme on course to be shuttered next month.
    * The U.S. dollar had been gaining in strength even before
the Fed statement, as speculation rose that the U.S. central
bank would raise rates sooner than the market consensus of
mid-2015. 
    * Gold has dropped for five sessions in the last seven as
any rise in rates would dim the appeal of non-interest-bearing
assets such as bullion.
    * Gold's slide to eight-month lows over the last week has
brought it within sight of a cluster of chart support lines near
its 2013 lows, a breach of which could set up a slide back to
$1,000 an ounce. 
    * Any support for gold prices could come from a pick up in
physical demand in Asia as a drop towards $1,200 an ounce could
potentially attract bargain hunters.
    * For the top stories on metals and other news, click
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    MARKET NEWS
    * Stock markets around the world closed with modest gains on
Wednesday after the Fed renewed its pledge to keep interest
rates near zero for some time, while bond yields rose and the
dollar rallied on expectations of higher rates down the road.
 
    
    DATA/EVENTS (GMT)
    0130 China House prices Aug 
    1230 U.S. Housing starts Aug 
    1230 U.S. Building permits Aug 
    1230 U.S. Weekly jobless claims 
    1400 U.S. Philly Fed business index Sep

    PRICES AT 0038 GMT    
 Metal            Last      Change   Pct chg
                                            
 Spot gold         1222.26    -0.73    -0.06
 Spot silver          18.5     0.03     0.16
 Spot platinum      1348.9      5.5     0.41
 Spot palladium     829.25     0.05     0.01
 Comex gold         1223.2    -12.7    -1.03
 Comex silver        18.54   -0.194    -1.04
 Euro               1.2855                  
 DXY                84.686                  
                                            
 COMEX gold and silver contracts show the
 most active months
 
 (Reporting by A. Ananthalakshmi; Editing by Joseph Radford)

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