Gold has sunk for the sixth straight session, reaching a five week low with more losses expected in the coming days. U.S. gold futures settled at $1,203.20 on Friday. Gold futures were at the lowest level since February 1st at $1,202.90 with the February level being $1,199.70.
Spot gold didn’t fair much better, as it was down by 0.32% at $1,203.58 per ounce. This is slightly higher than the previous low of $1,202.70. The losses are being attributed to the certainty surrounding an interest rate rise by the U.S. Federal Reserve.
In a speech earlier this month Janet Yellen, the chair of the U.S. Federal Reserve, commented on the current economic climate.
“We currently judge that it will be appropriate to gradually increase the federal funds rate if the economic data continue to come in about as we expect,” Yellen said.
“Indeed, at our meeting later this month, the committee will evaluate whether employment and inflation are continuing to evolve in line with our expectations, in which case a further adjustment of the federal funds rate would likely be appropriate.”
Certainty also came from improvements in the unemployment rate in the U.S., with it reaching a historic low of 4.8%.
Investors are still awaiting non-farm payrolls which are set to release on Friday in the U.S. If it exceeds market expectations, it will likely cause gold prices to drop even further and all but confirm an interest rate rise.
The U.S. Federal Reserve will be meeting on the 14th-15th of February to make a decision on U.S. interest rates.