Staff members of the Federal Reserve Bank count foreign-owned gold bullion in a depository vault in the Federal Reserve Bank of New York. (Photo : Getty Images)
Gold prices climbed from a 10-month low as the dollar and U.S. stocks decline after a week highlighted by Federal Reserve's announcement that further increases of interest rates may be seen next year.
A report by news.com.au said that spot gold rose up by 0.6 percent at $1,135.16 an ounce by 2:30 p.m. EST (1930 GMT). From its weakest point in February and the 2-percent drop last week, gold hit $1,122.35 on Thursday, Dec. 15. Meanwhile, U.S. gold futures closed at 0.7 percent at $1,137.40.
The prices of gold climbed to a period high after reports broke out that an underwater drone of the U.S. oceanographic ship was seized by a Chinese patrol boat in the South China Sea.
"It gave gold a little bit of a boost but it was a knee jerk spike. It looks like both sides are trying to tweak each other, if you will," Bill O'Neill, co-founder of LOGIC Advisors, was quoted as saying.
"Today's something of a consolidation day across the board," he added.
On Thursday, Dec. 15, the dollar declined from the 14-year high against a basket of currencies when markets shifted in anticipation for a more aggressive U.S. central bank.
"The rate hike this week from the Fed and the hawkish outlook for next year leave a fairly negative picture for gold," Warren Patterson, an ING commodity strategist, said.
For foreign firms, gold will become more expensive as the increase in interest rates next year could send the U.S. currency higher.
"The nature of recent gold selling implies fresh shorting as well as liquidation," HSBC analyst James Steel said in a note.
Gold exchange traded funds showed that investors are not interested in gold while the holdings of the SPDR Gold Trust, the largest gold ETF in the world, has fallen by more than 10 percent since November.
Meanwhile, other precious metals also showed an increase in the market, the report said. Silver rose up by 0.6 percent at $16.05 an ounce, after a decline of more than 5 percent on Dec. 15.
On the other hand, platinum climbed 3.50 percent to $924.80, after posting its lowest point since early February while palladium dropped 1.5 percent at $689.50 after it slid to a one-month low at $677.25.
