Gold price sinks six-year low on Fed rate hike fears

Gold prices plunged on Thursday to a six-year low in the international markets amid fears of the US Federal Reserve hiking short-term interest rates at its December 15-16 policy meeting in Washington.

In the London bullion market, spot gold fell to $1,050.60 from $1,066.90 per ounce on Wednesday, which are the lowest since February 2010. US gold futures too dipped to $1,l045.40, the lowest since October 2009.

In the New York Mercantile Exchange (NYMEX) too, gold for February delivery dropped $1.90 cents to $1,051.90 a troy ounce.

In India, 24-carat gold was quoted at Rs.24,760 per 10 gramme in early trading in the Mumbai bullion market as against Rs.24,931 on Wednesday and Rs.26,513 per 10gm as against Rs.26,759 on Wednesday in the retail market.

In the Bengaluru retail market, gold was traded at Rs.2,572 per 10gm.

The yellow metal lost its sheen after Fed chair Janet Yellen said in Washington on Wednesday that the US central bank was on track to hike interest rates, as the American labour market improved in November.

According to US media reports, Yellen's remarks came at a speech on the economic outlook after a processing firm (ADP) reported that non-farm jobs increased to 217,000 in November from its projected numbers -- 190,000.

A strong non-farm payrolls report on Friday will also spur Fed rate hike, even as inflation is expected to return to two percent in the medium term.

Yellen was also quoted hinting an imminent rise in interest rate from near-zero rates on the US economy recovering from seven-year recession, as evident from job growth since October.