Gold languished near its lowest level in nearly six years on Tuesday, while silver and platinum also held near multi-year lows on a strong dollar and increasing expectations that the Federal Reserve would increase U.S. interest rates next month. Spot gold was little changed at US$1,069.67 an ounce today. The metal had fallen to US$1,064.95 last week, its lowest since February 2010. Silver slumped to US$13.86 on Monday, the lowest since August 2009, while platinum was close to US$839.50 reached in the previous session, its lowest since December 2008.
The dollar rose to an eight-month high on Monday over speculation of a hike next month. A strong greenback makes dollar-denominated gold and other metals more expensive for holders of other currencies. As a result, investors have been pulling out of precious metals funds at a rapid pace, further hurting sentiment. Assets in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.77% to 655.69 tonnes on Monday, the lowest since September 2008. Holdings of platinum ETFs are at a two-year low, while assets in palladium funds are close to their lowest since April 2014.
Elsewhere in metals market, copper sank to the lowest level since May 2009 on Monday, also due to the possibility of higher interest rates in the U.S., a broadly stronger U.S. dollar and slower global economic growth, especially in China, weighed. Prices of the red metal are down nearly 30% since May as fears of a China-led global economic slowdown spooked traders and rattled sentiment. The Asian nation is the world’s largest copper consumer, accounting for nearly 45% of world consumption.
Silver was once one of the top-performing assets in the metals bull market. From the beginning of the natural resource bull market in 2002 to when they hit nearly US$50 an ounce in 2011, silver prices saw increases of up to 1,000%. Since then, silver has seen a sharp and fast decrease in price, recently pushed to near six-year lows. Closing just above US$14 yesterday, it is a 72% drop since 2011. Gold prices nearly hit US$1,900 back in 2011, while platinum reached US$1,900 in September 2011.