Gold heads for monthly decline as Fed rate fears damp its appeal

Gold is headed for the first monthly decline since May as investors price in the prospect of higher US borrowing costs by the end of the year and slowing purchases of bullion-backed exchange-traded funds.

Bullion for immediate delivery was 0.2 per cent higher at US$1,313.49 an ounce at 9:29am in Singapore, according to Bloomberg generic pricing. The metal dropped to US$1,309.34 on Tuesday, the lowest level since June 28, and is down 2.8 per cent this month.

Gold's drop this month would be the first for August since 2009, as the metal generally climbs on jewelry demand ahead of the wedding and festival season in India, the top consumer along with China. The pullback has followed hawkish comments by Federal Reserve officials, which have increased bets on monetary tightening and boosted the US dollar.

Fed Vice Chairman Stanley Fischer said Tuesday incoming economic data will determine the trajectory of interest-rate increases and expressed optimism that productivity growth will rebound.Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg