Gold prices are well on their way to their largest loss in two weeks as the U.S. dollar gains and inflation is tamed, Bloomberg reported.
According to Bloomberg, gold futures for December delivery lost 0.5 percent to $1,245.40 an ounce at 9:26 a.m Wednesday on the Comex in New York. Should the precious metal close the day at that price, it would mark the biggest drop since Oct. 8. Just yesterday, prices reached $1,255.60, which was the highest level since Sept. 10. Inflation remained below the Federal Reserve's goal, while the the Bloomberg Dollar Spot Index, a measure against 10 major currencies, reached a one-week high today.
"Lack of inflation and strength in the dollar has put a damper on gold purchases in the near term. Also, the rebound in the equity market is taking some investors away from gold," said Adam Klopfenstein, a senior market strategist at Archer Financial Services in Chicago in a phone interview with Bloomberg.
While the stronger dollar and weaker inflation put downward pressure on the precious metal, The Wall Street Journal noted that there is some evidence that high demand in India could be what is keeping gold prices from falling too much. The current religious festival season has increased demand for gold in India.
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