NEW YORK (BLOOMBERG) - Gold dipped below US$1,200 an ounce on Thursday (March 9) in its longest losing run since October as positive US economic figures reinforce expectations that yields on other investments will rise this year.
Bullion for immediate delivery fell as much as 0.7 per cent to US$1,199.35, the lowest since Feb 1, and settled at US$1,201.24, according to Bloomberg generic pricing. The metal slid Thursday for a fourth day as yields on 10-year Treasuries extended gains.
The precious metal has been hit by Federal Reserve officials including chair Janet Yellen talking up the prospect of higher interest rates this month. Better-than-expected US private jobs data this week also boosted the US dollar before official payrolls figures on Friday. A stronger dollar makes gold costlier for those with other currencies.
"If the data continues to be as good as it was, or improves, we could see the Fed move toward further hawkishness," said Brad Yates, head of trading for Elemetal, one of the biggest US gold refiners. "That could hurt gold."
After the Fed raised rates once in 2015 and again in 2016, the pace may quicken this year.
The so-called dot plot illustrating policy makers' projections suggests three increases this year. While economists see US non-farm payrolls declining, possibly supporting gold, their projections have underestimated employment growth in February for five years in a row.