London: Gold fell to its lowest since February yesterday, extending losses after its biggest monthly decline in more than three years, as a surge in oil prices boosted bond yields, denting interest in non-yielding gold as an alternative investment.
The precious metal fell more than 8 percent in November, hurt by a jump in the dollar and Treasury yields, and by expectations that the Federal Reserve is gearing up to lift interest rates for only the second time in a decade this month. That led to hefty outflows from gold-backed exchange-traded funds, the largest of which, New York-listed SPDR Gold Shares , said its holdings fell nearly 60 tonnes in November. Spot gold was down 0.4 percent at $1,168.27 an ounce at 1020 GMT, while U.S. gold futures for February delivery were down $4.00 an ounce at $1,169.90.
“The key story for gold is still the combination of a stronger dollar and rising Treasury yields,” Julius Baer analyst Carsten Menke said. “Either of the two is not really helping gold at the moment.”
“We’ve seen outflows of around 5 million ounces (from ETFs) since the U.S. election, and these are mainly from the U.S.-listed products,” he said. “There is a real rotation away from safe-haven investments, and towards pro-growth assets.”
Silver was 0.7 percent lower at $16.35 an ounce, while platinum was down 0.7 percent at $904.75 after hitting its lowest since Feb. 8 at $895 earlier in the session. Palladium was up 0.3 percent at $772.20, having outperformed other precious metals last month to rise 24 percent, its best month since February 2008.
