Gold falls to over 10-month low as Fed signals faster pace of rate hikes in 2017

Gold bars are seen at an Austrian Gold and Silver Separating Plant. Gold prices fell on Thursday (Dec 15) to a new low in more than 10 months after the US central bank raised interest rates for the first time in a year.
Gold bars are seen at an Austrian Gold and Silver Separating Plant. Gold prices fell on Thursday (Dec 15) to a new low in more than 10 months after the US central bank raised interest rates for the first time in a year.PHOTO: REUTERS

NEW YORK (REUTERS) - Gold prices fell on Thursday (Dec 15) to a new low in more than 10 months as the US dollar surged after the US central bank raised interest rates for the first time in a year and signalled further rate hikes for 2017.

Spot gold edged 0.4 per cent lower to US$1,139.54 an ounce by 0108 GMT (9.08am Singapore time). The bullion touched a new low of US$1,134.71 an ounce, its lowest since Feb 3. The yellow metal fell over 1 per cent in the prior session.

US gold futures fell nearly 2 per cent to US$1,141.80 per ounce. The prices fell to US$1,136.4 an ounce earlier in the session to their lowest since Feb 1 and registered their biggest percentage fall in one month.

The dollar index, which measures the greenback against a basket of currencies, was up 0.7 per cent at 102.490. The dollar hovered near a 14-year peak against a basket of major currencies on Thursday.

 
 

The US Federal Reserve raised interest rates on Wednesday and signalled a faster pace of increases in 2017 as central bankers adapted to the incoming Trump administration's promises of tax cuts, spending and deregulation.

Holdings of the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.80 per cent to 849.44 tonnes on Wednesday.