Gold, a non-interest-paying asset, could take a hit from higher rates as the dollar has gained in recent times and this has resulted in an increase in the opportunity cost of its holding.
The shine of gold lessens with the downfall on price by a drastic margin. It nears a low in almost six years by a great margin. In 2-1/2 years this has been the steepest fall on the US prospects. The sort gold was up by 0.9 percent at a dollar rate of 1066.40 an ounce.
“We’ve got the payroll (data) this Friday and you don’t want to be short ahead of that”, said Eli Tesfaye, the senior market strategist for the brokerage Retail Jewelers Organization (RJO) Futures in Chicago.
The dollar rate was at a high in 8-1/2 months against the basket of major currencies, thus making gold costlier to the holders of various other currencies.
The dollar was at an 8-1/2-month high against a basket of major currencies, making gold prices to fall further.
In November, the Bullion has lost 7.5 percent of its value; its biggest monthly dip since June 2013, the investors has remained focused on a possibly imminent rate hike in the United States.