|By TAP Staff| Gold traded near a three-month low as the dollar advanced on speculation the Federal Reserve will increase interest rates next year, curbing demand.
Gold has declined 5.2 percent this quarter as the outlook for higher borrowing costs reduced demand for an inflation hedge. Fed policy makers will meet Sept. 16-17. The Bloomberg Dollar Spot Index, which tracks the greenback against a basket of 10 peers, climbed to the highest since July 2013 today. The Standard & Poor’s 500 Index rose to a record close on Sept. 5.
“Short-term traders seeking yields are looking for other alternatives,” said Jonathan Barratt, the chief investment officer at Ayers Alliance Securities in Sydney. “People who have gold are moving out of gold and they have been for some time. It’s a trade that nobody wants,” Bloomberg quoted in a report.
Holdings in exchange-traded products fell for a second week in the period ended Sept. 5, according to data compiled by Bloomberg. Assets in the SPDR Gold Trust, the biggest ETP backed by bullion, fell 1.2 percent to 785.72 tons last week, the most since May 2, data on the company’s website show.
