Gold flirts with 5-1/2-year low as dollar lifts on Sept Fed hike view

July 30, 2015 09:31

Gold dipped towards its weakest level since early 2010 on Thursday after the Federal Reserve said the US economy continues to strengthen, supporting a potential interest rate rise when the Fed meets again in September.

After a two-day meeting, policymakers said on Wednesday they felt the economy had overcome a first-quarter slowdown and was "expanding moderately".

That buoyed the greenback against a basket of currencies, making dollar-priced gold more costly for buyers using other currencies.

Spot gold dropped 0.3 percent to $1,093.40 an ounce by 0239 GMT. It sank to as low as $1,077 last week, its weakest since February 2010, after a selloff in New York and Shanghai and has since struggled to recover above $1,100.

"We still do think the bearish pressure on gold prices is strong. We don't expect to see any substantial recovery," said Howie Lee, analyst at Phillip Futures in Singapore.

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