Gold slips below $1,200 level in longest losing run since October

Gold slips

The prices of gold slumped below $1,200 per ounce on its longest losing streak since October as positive U.S. economic figures reinforce expectations that yields on other investments will rise this year.

According to Bloomberg generic pricing, bullion set for immediate delivery went down as much as 0.3 percent to $1,197.70, the lowest since January 31 and was at $1,198.57. The metal dropped 2.9 percent this week after dropping on all five days as yields on 10-year Treasuries extended gains, making non-interest bearing assets less desirable.

The precious metal has been hit by officials of the Federal Reserve including Chair Janet Yellen speaking of the possibility of higher rates in March. The dollar was boosted by the better-than-expected U.S. private jobs data even before the official payroll figures this late Friday, which is the last major economic news before the Federal Reserve meeting next week. Meanwhile, the European Central Bank signaled it won’t add to stimulus as growth picks up.

“If the data continues to be as good as it was, or improves, we could see the Fed move toward further hawkishness," Brad Yates, head of trading for Elemental, one of the largest refiners of gold in the U.S. said. “That could hurt gold.”

After the Federal Reserve increased rates in 2015 and again in 2016, the pace may quicken this year. The so-called dot plot illustrating policy makers’ projections suggests three increases this year. The projections of the economists have underestimated employment growth in February for five years in a row despite them seeing U.S. non-farm payrolls declining, possibly supporting gold.

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