Melbourne: Gold in Asia declined as dollar gained against the euro for the second day, reducing the appeal of the precious metal as an alternative asset.
The dollar gained as traders increased bets the Federal Reserve will keep raising interest rates, after minutes of its latest meeting were released on Wednesday.
Gold shed 11 per cent from a 26-year high of $730.40 an ounce on May 12.
Interest-rate futures show traders are pricing in a 72 per cent chance the Fed will raise its benchmark to 5.25 per cent on June 29, compared with 58 per cent before the report and 32 per cent on May 1.
Gold fell as much as $10.07, or 1.6 per cent, to $635.13 an ounce.
The dollar strengthened to 1.2779 per euro in Sydney, from 1.2808 in late New York on Wednesday.
Gold also fell as the precious metal's appeal as a hedge against inflation and a safe-haven asset fell, market men said.
The US will join European talks with Iran about its nuclear program if the Iranian government agrees to verifiably halt enrichment if uranium, US Secretary of State said.
"Ever since gold has taken a correction from $730, open interest has decreased and people are staying away from the market," they said.
Gold futures for August delivery fell $8.50 or 1.3 per cent, to $640.50 dollar an ounce on the Comex division of the New York Mercantile Exchange.
A futures contract is an obligation to buy or sell a commodity at a set price for delivery by a specific date.
Comments
0 comment