Gold slips 1% as dollar rallies on Fed moves

Gold headed for its biggest weekly fall since August yesterday as the dollar rose towards 16-month highs after the US Federal Reserve stuck to its tighter monetary stance and looked set to deliver another rate hike in December.

Spot gold was down 0.9 per cent at $1,212.20 per ounce at 1341 GMT, having touched its lowest since October 31 at $1,211.32 earlier. US gold futures fell 1 per cent to $1,212.9 per ounce.

Spot prices are down 1.6 per cent for the week, which would be its biggest decline since the week of August 17.

“It is pretty clearly a dollar-related move today, which has happened since the latest decision from the US Fed,” said Capital Economics analyst Ross Strachan.

The sentiment in the market “is quite cautious after recent spikes, consolidating in the $1,220 to low $1,230 levels and not breaking out of that,” he said.

Spot gold touched a peak of $1,243.32 on October 26, its highest since mid-July.

The dollar firmed towards a 16-month peak yesterday, underpinned by a robust US economy and a rising interest rate environment, making bullion more expensive for holders of other currencies.