Uncertainty over the Federal Reserve’s easy-money policies has sparked a selling of gold futures.
The most actively traded contract, for June delivery, on Monday settled down $US5.20, or 0.4 per cent, at $US1,298.30 a troy ounce on the Comex division of the New York Mercantile Exchange.
Gold prices are down nearly six per cent since hitting a six-month peak of $US1,3790 an ounce in mid-March, weighed by signals from the US central bank that it may raise benchmark interest rates around six months after it ends its bond-purchasing program.
Historically low interest rates and the bond purchases, known as quantitative easing, have increased demand for gold and pushed its price higher. The end to these policies would reduce gold’s appeal for investors.
Traders are now looking to the Fed for more guidance this week when it is scheduled to release the minutes from its meeting last month.
“Funds are taking money off the table,” said George Gero, a senior vice president with RBC Capital Markets Global Futures. Traders are “concerned about Wednesday’s release of the Fed minutes,” he said.
“One thing the markets really dislike is uncertainty,” Gero said.
Other precious metals also eased, with palladium for June delivery ending down 2.9 per cent at $US767.65 an ounce, the lowest since March 27, while platinum for July lost 1.6 per cent to end at $US1,427.80 an ounce, the lowest since March 31.
