Zimpapers Logo

MANILA. — Gold dipped towards its weakest level since early 2010 yesterday after the Federal Reserve said the US economy continues to strengthen, supporting a potential interest rate rise when the Fed meets again in September. After a two-day meeting, policy makers said on Wednesday they felt the economy had overcome a first-quarter slowdown and was “expanding moderately”.

That buoyed the greenback against a basket of currencies, making dollar-priced gold more costly for buyers using other currencies.

Spot gold dropped 0,3 percent to $1 093,40 per ounce by 2.39am GMT. It sank to as low as $1 077 last week, its weakest since February 2010, after a sell-off in New York and Shanghai and has since struggled to recover above $1 100.

“We still do think the bearish pressure on gold prices is strong. We don’t expect to see any substantial recovery,” Phillip Futures analyst Howie Lee said in Singapore.

Whether a US rate hike — which would be the first since 2006 — came in September or December was immaterial, said Mr Lee who expected the next major support at $1 000. — Reuters.