New York - Gold prices advanced to trim a third annual decline as investors focused on the outlook for 2016.
Bullion for immediate delivery rose 0.1 percent to $1 069.90 an ounce at 3:45 p.m. in Singapore from $1 069.11 on Tuesday, according to Bloomberg generic pricing. It’s down 9.7 percent this year against a dollar gain of 8.7 percent.
The greenback’s rise amid expectations of higher borrowing costs in the US, which culminated in the Federal Reserve raising interest rates this month, have contributed to gold losing its allure as a store of value. As investors look to the pace of further rate increases in 2016, aggregate volumes for gold futures in New York have been below the 30-day average since mid-December.
“Interest rate raises will be at a slow pace, maybe a maximum of four increases of 25 basis points - and that’s already priced in,” Tetsu Emori, president of Emori Capital Management, said by phone from Tokyo. “If the economic situation is a little bit gloomy and the Fed decides to raise interest rates only two or three times, that should push down, or cap the US dollar, and help gold prices.”
Holdings in exchange-traded products fell to 1 466.3 metric tons on Tuesday, data compiled by Bloomberg show, near their lowest since 2009.
Spot silver retreated 0.3 percent and is down 11 percent this year. Platinum climbed 0.3 percent for a 26 percent annual decline. Palladium was little changed and has slumped 30 percent in 2015, the most since 2008.
BLOOMBERG