Gold has taken a hit on the prospect of U.S. interest rate hike next month
Gold dropped to a seven-week low on Wednesday’s trading session after positive U.S. economic data boosted expectations of a U.S. interest rate hike as early as next month. The precious metal fell more than 4% since last Wednesday when statements from Fed officials indicated that the central bank was preparing for a rate hike. Higher borrowing costs have a positive effect of the dollar’s value, making it more expensive to invest in gold. As of this writing, spot gold declined 0.26% to $1,223.27 an ounce.
European stock market rose higher and set the positive tone for Wall Street later on. The German DAX 30 added 1.47%, the pan-European STOXX 600 rose 1.3%, and the UK’s FTSE 100 0.7%. The financial sector was supported by reports that Eurozone finance ministers have offered Greece a ‘breakthrough’ deal in the country’s ongoing debt crisis. According to reports, the International Monetary Fund has agreed to rejoin the efforts in Greece’s bailout, increasing European investors’ confidence.
This week’s major economic data releases continue with the UK’s GDP data today, followed by U.S. durable goods later in the day. The week will conclude with U.S. GDP and comments from the Federal Reserve’s Janet Yellen on Friday. For the most important binary options news, stay updated with OptionsClick, the top binary options trading broker.