LONDON: Gold fell yesterday extending last week’s slide as indications the Federal Reserve may still raise interest rates this year, despite recent market turmoil, offset a retreat in the dollar. Spot gold fell 0.4 percent to $1,129.01 an ounce by 1348 GMT, while US gold futures for December delivery dropped $5.50 an ounce to $1,128.50. Gold fell 2.3 percent last week after a slide in Chinese equities rattled wider markets. The Federal Reserve left open the possibility of a September rate rise at a central banking conference at Jackson Hole, Wyoming, at the weekend, though several officials indicated that prolonged financial market turmoil might delay such a move.
Fed Vice Chairman Stanley Fischer said on Saturday that US inflation was likely to rebound as pressure from the dollar fades, allowing for a gradual rise in rates. “Last week it was felt that maybe the Fed would postpone the interest rate hike to December, but now, after the latest comments, you can say that it’s still possible that it will be in September,” LBBW analyst Thorsten Proettel said. “Of course, that is a burden for the gold price.” “People are waiting to see what’s going on in China. That and the interest rate decision will be the most important factors for the gold price over the next days and weeks.” —Reuters