Gold levels out but is expected to face pressure again soon
Higher interest rates in the US are weighing on investor demand, and a weak physical market is expected to affect the price of gold
London — Gold steadied on Monday as the dollar slipped, but higher interest rates in the US weighing on investor demand and a weak physical market are expected to pressure prices of the precious metal. Spot gold was up 0.2% at $1,244.13 an ounce at 9.21am GMT, after marking the lowest since December 12 at $1,236.58 on Friday. US gold futures were 0.2% higher at $1,244.2 an ounce. A lower US currency makes dollar-denominated gold cheaper for holders of other currencies, which could boost demand. In June, the Federal Reserve raised its benchmark overnight lending rate 25 basis points to 1.75%-2.0%. Expectations are for another two rate rises in 2018 and three in 2019. Gold does not earn any interest or dividends and costs money to store and insure. "While interest rates were zero, there was no real cost to holding gold, it was just like holding cash; now there is a cost," Macquarie analyst Matthew Turner said. "The lack of big compelling themes is a problem for gold; prices are very h...
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