Gold stuck near 7-1/2 month low - set for worst week in 3 months

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AP

Gold prices hit 7-1/2-month lows on Friday as the dollar index headed for its longest winning streak since 1997, and on speculation that the Federal Reserve may raise interest rates next year.
 
The precious metal is on track for its biggest weekly fall since late May, with a drop of 2.4 percent. Its weakness has dragged down other precious metals, with platinum hitting a 2014 low of $1,350.40 an ounce.
 
Spot gold fell as low as $1,228.60 an ounce, its weakest since Jan. 10, and was last down 0.6 percent at $1,233. U.S. December gold futures were down $5 an ounce at $1,234, off a low of $1,228.60.

Symbol	Name	Price		Change	%Change	Volume
GOLD	Gold (Dec'14)	1229.30		-9.70	-0.78%	127108
GOLD/USD	Gold / US Dollar Spot	1228.95		-11.54	-0.93%	---
SILV/USD	Silver / US Dollar Spot	18.59		-0.05	-0.27%	---
SILVER	Silver (Dec'14)	18.61		0.011	0.06%	33418
PALL/USD	Palladium / US Dollar Spot	830.40		1.60	0.19%	---
PLAT/USD	Platinum / US Dollar Spot	1364.24		-0.06	-0.00%	---

"The market remains under pressure from expectations for a stronger U.S. currency in the longer run and with physical buyers still absent, unwilling to support prices on fresh lows,'' Andrey Kryuchenkov, an analyst at VTB Capital, said. ``The gold market sentiment is overwhelmingly bearish.'' Bearish momentum indicators for gold have accelerated, and a sustained break below $1,232 could take gold near $1,180, technical analysts at ScotiaMocatta said.

Gold is suffering from growing expectations that the Fed will raise interest rates in 2015, which would boost the dollar, in which the metal is priced, while raising the opportunity cost of holding non-yielding bullion.
 
The dollar index was holding near a 14-month high on Friday and was firmly on track to post its ninth consecutive week of gains, boosted by strong economic data and expectations the U.S. Federal Reserve would soon raise interest rates.

Gold was also hurt after Ukraine's president said this week Russia had removed the bulk of its forces from his country, raising hopes for a peace drive now underway after five months of conflict in which more than 3,000 people have been killed.
--By Reuters