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The strengthening U.S. economy is translating to a stronger dollar, which is often a problem for gold. Gold, like other commodities, is denominated in dollars, meaning it has an inverse relationship to the U.S. currency.
“Betting that the US Fed will raise its key interest rate twice or more before 2018 ends has meantime risen to 61.3% of speculative positions on CME Group derivatives, up from 55.1% this time last month,” reports Bullion Vault.
Rising rate expectations have diminished the appeal for hard assets like gold, which do not provide a yield or coupon payments.
For more information on the gold market, visit our gold category.
Tom Lydon’s clients own shares of GLD.