Gold prices dipped for consecutive days as safe haven demand ebbed amid a rebounding dollar.
Gold for December delivery on the Comex division on the New York Mercantile Exchange was last down $13.10 or 1.1 percent at $1,125.20 per ounce. Trade has ranged from $1,122.90 to $1,146.0.
The yellow-metal is still $50 higher than the five year lows seen at the end of July.
However, a normalisation of US interest rates at the September Federal Open Market Committee (FOMC) could send the dollar higher and consequently weigh on the precious metal’s complex.
US interest rates have hovered around near zero levels since December 2008 and a rate increase hasn’t taken place in over a decade. In recent months, Federal Reserve Chairwoman Janet Yellen has grown insistent on raising interest rates in 2015.
“Gold as a currency has regained some mojo since its July low, on favourable economic developments and a potential delay to Fed tightening,” Macquarie Research said. “We think this is only a temporary respite and investors should remain cautious until the Fed acts.”
The CME Group Fedwatch – a tool to gauge market expectations of a rate hike – was last at a 24 percent probability of a rate hike in September. Over the last month, the figure has ranged from 50 to zero.
Meanwhile, inflows into gold ETFs continued – holdings in the funds tracked by FastMarkets have increased to 1,536.95 tonnes.
Turning to China, Shanghai composite index closed 1.3 percent down, its lowest since December, after a volatile trading session.
China is in the process of injecting $21.80 billion through a short-term liquidity adjustment to quell fears in the financial markets, according to various reports. The volume of money flowing out of the country over the past few days has raised worries that Chinese lenders might run short of cash.
In US data, durable goods orders month-over-month was up 0.6 percent, above the forecast of -0.4 percent. Additionally, the revised figure was adjusted to an increase of 3.4 percent.
Core durable goods jumped two percent month-on-month smashing expectations of a 0.3 percent uptick.
The dollar was last 1.2 percent stronger at $1.1375 against the euro, while Germany’s DAX and France’s CAC-40 were each down 0.1 percent.
As for the other precious metals, Comex silver for September delivery was last down 42.5 cents at $14.185 per ounce. Trade has ranged from $14.065 to $14.705.
Platinum for October delivery on the Nymex declined $1.60 to $975.10 per ounce, while the most-actively traded palladium contract was at $526.35 per ounce, down $13.75.
(Editing by Tom Jennemann)
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