Gold slides as Fed indications push dollar higher

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Gold slides as Fed indications push dollar higher

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Investors have been selling gold as the US dollar jumped in value.

The spot gold price slipped one percent on Wednesday, and on Thursday touched its lowest level since the start of January at $1,222.01 an ounce.

The dollar’s bounce follows the Federal Reserve indicating it could raise borrowing costs faster than expected when it does start putting up interest rates.

The precious metal has benefited from the fact that it was a better investment in the low interest rate environment in the years since the credit crisis in 2008.

But as the US economy normalises and interest rates are projected to rise, interest in gold is waining in the West.

Before Thursday, gold had dropped for four sessions out of six on worries of an early US rate increase.

In its 2014 Interim Gold Report, Thomson Reuters GFMS said prices are set to average $1,270 an ounce this year, down from $1,410 in 2013, and should bottom out between $1,170 and $1,200 in 2015.

with Reuters