Gold Resumes Downward Slide

By Biman Mukherji 

        HONG KONG--Spot gold prices dropped below the psychological threshold of $1,080 on Friday in Asian trade, continuing their slide after a brief respite.
        Gold recently traded at $1,081.70 a troy ounce but fell below $1,079 earlier in the session, nearing a five-year low reached earlier this week.
        Overnight, gold prices had made a slight gain after 10 consecutive down days as a weaker dollar and lower prices lured buyers back into the market.
        But persistent selling has mostly pushed gold prices lower this week as investors jettisoned the precious metal on expectations that the Federal Reserve will soon raise interest rates for the first time in nearly a decade. Gold is down 6.6% in the month through Thursday, and has lost 7.4% of its value this year.
        Fed Chairwoman Janet Yellen recently reiterated the central bank's plans to increase borrowing costs this year, prompting traders to adjust their expectations for the path of U.S. monetary policy and its impact on gold prices.
        Gold doesn't produce an income and costs money to hold, and would struggle to compete with such yield-bearing assets as Treasury bonds when rates climb.
        Other precious metals also continued to decline Friday, with silver and platinum off about 0.6%. Both metals are trading at multiyear lows.
        Write to Biman Mukherji at biman.mukherji@wsj.com
        (END) Dow Jones Newswires

        July 24, 2015 00:29 ET (04:29 GMT)

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