Gold Falls Below $1,200 as Stock Markets Boom, Fed Set to Raise
Gold futures fell below $1,200 an ounce for the first time since February as the Federal Reserve prepares to hike interest rates, U.S. stocks notch up records and Donald Trump gets ready to take office.
The exodus has unfolded as gold prices head for a second monthly decline on expectations President-elect Trump will bolster spending, helping push the odds for a rate increase next month to 100 percent and boosting the dollar. Minutes of the Fed’s November meeting due later Wednesday are likely to confirm officials were moving closer to raising borrowing costs before the election, and developments since have served only to bolster the case for tightening. Major U.S. stock benchmarks rallied to records on Tuesday.
Gold futures for December delivery fell 1.3 percent to $1,195.90 an ounce at 8:35 a.m. on the Comex in New York.
“It took a bit longer than I thought, but we got there,” David Govett, head of precious metals trading at Marex Spectron Group said by e-mail of the drop below $1,200. “It’s not looking great for gold.”