SINGAPORE – Gold extended its losing streak to a third day on a surge in investors’ expectations that US central bankers may hike interest rates as soon as this month, buoying the dollar and undercutting demand for the metal.
Bullion for immediate delivery tumbled as much as 0.5% to $1 242.54 an ounce and traded at $1 244.28 at 11:32 a.m. in London, according to Bloomberg generic pricing. That followed a 0.3% loss on Tuesday and 0.4% drop on Monday, paring the metal’s gain this year to 8.5%.
Gold has been thrown into reverse amid a rapid rethink by investors about whether the Federal Reserve could move this month. On Tuesday, New York Fed president William Dudley said the case for tightening had become a lot more compelling, while the San Francisco Fed’s John Williams said he expects a rate rise will receive serious consideration at the March 14-15 meeting. A policy speech to Congress by President Donald Trump that lacked specifics wasn’t seen as moving the dollar, according to Oanda Corp.
The speech by Trump “was rhetoric high and detail low and everything he mentioned is already built into the USD price,” Jeffrey Halley, senior market analyst at Oanda in Singapore, said by email. Attention will now turn to a speech by Fed chairperson Janet Yellen that’s due on Friday, according to Halley.
The Bloomberg Dollar Spot Index rose as much as 0.6%, gaining for a fourth straight day. Odds of a March hike implied by pricing in federal funds futures contracts surged to 82%, up from 50% on Monday and 34% a week ago.