Gold
headed for its biggest loss in a week as a private report signaling
U.S. employment growth added to speculation that the Federal Reserve is
getting closer to raising interest rates.
Firms
added more jobs in August than a month earlier, the ADP Research
Institute said on Wednesday. Traders will be focused on the government
payrolls report due Friday for more clues on whether growth is strong
enough to sustain higher rates. Stubbornly low inflation along with the
prospect of tighter U.S. monetary policy has kept a lid on gold, which
doesn’t pay interest or offer returns, unlike competing assets.
Global
holdings in exchange-traded products backed by gold fell Tuesday by the
most since July. While bullion prices got a lift in August amid a
Chinese equity rout, signs of resilient U.S. expansion since then have
increased speculation that Fed officials will follow through with their
plans for tighter monetary policy this year.
Gold
futures for December delivery dropped 0.5 percent to $1,133.70 an ounce
at 11:23 a.m. on the Comex in New York, headed for the biggest decline
since Aug. 26.
Assets
in ETPs dropped by 6.9 metric tons on Tuesday to 1,522.7 tons, the
biggest drop decline since July 31. The holdings have shrunk 12 percent
in the past 12 months as some investors lost their faith in the metal as
a store of value.
Source: Bloomberg
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