Gold for August delivery settled down 0.3% at $1,294.80 a troy ounce on the Comex division of the New York Mercantile Exchange and traded as low as $1,289.70 Friday morning. The move lower comes after a seven-day winning streak that led gold prices to a two-year high.
Traders attributed the pullback in gold prices to profit-taking among bullish investors, after fears over Britain leaving the European Union and signs that the Federal Reserve will be slow to raise rates gave a boost to the precious metal.
“There’s nothing today that’s overly exciting and dramatic to allow the rally to continue. Markets have to breathe, and that’s exactly what gold’s doing,” said Bill O’Neill, a broker at LOGIC Advisors.
Gold has soared this year amid economic uncertainty and diminishing expectations for an interest-rate increase. On Wednesday, the Federal Reserve left short-term rates unchanged and lowered projections for the number of rate increases in the coming years. Lower interest rates are a boon to gold, which pays its holders nothing and struggles to compete with yield-bearing assets when borrowing costs rise.
The precious metal has risen 22% year to date, which has prompted many investors to jump back into gold, believing that it will continue to perform well amid low and negative interest rates and worries about economic stability.
“The funds are back in trying to buy gold on dips” in prices, said George Gero, managing director at RBC Wealth Management.
Gold pulls back as investors take profits
18 June 2016
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Gold prices fell Friday as a recent rally in the precious metal prompted some investors to cash out on previous positions, AzVision.az reports citing the Wall Street Journal .
