Gold prices fell Wednesday after scoring a roughly two-week high a day earlier, as strength in U.S. bond yields and the U.S. dollar weakened demand for the metal.
Concerns that Italy’s budget woes could ripple through global markets also faded a bit Wednesday, contributing to gold retreating from Tuesday’s close.
Outside of the United States, there is a strong case for owning gold if you are in an emerging market economy or anywhere that your local paper currency is being devalued by debt
Beyond the recent haven demand for gold, interest rates remain the chief driver for gold. They’re sensitive to Federal Reserve interest-rate increases because they can push up U.S. bond yields, which can reduce the attraction of nonyielding bullion, and tend to boost the dollar, which makes gold more expensive for buyers using other currencies.
The Fed is expected to raise its benchmark rate for a fourth time this year in December and expectations for that move and any further tightening could be informed by Friday’s payrolls data, particularly its wage component. This will almost certainly move gold further down.
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