Gold is trading lower today after Friday's gains following a sell off on Thursday. In January Gold advanced the most in three years gaining 8%. The political turmoil in Greece lends support to the precious metal. The new Greek government said that it will not collaborate with the IMF and the EU fuelling fears about instability in the Eurozone.
Expectations that the FED is going to hike interest rates in mid-2015 as the U.S. economy is growing and the labour market is improving put pressure on gold. Higher interest rates make gold less attractive as the metal is not yield-bearing. A stronger greenback also weighed on the dollar-denominated precious metal as it makes it more expensive for holders of other currencies.
The precious metal is currently quoted at USD1,273.80, -0,82% a troy ounce. On Thursday the 22nd of January gold reached a five-month high at USD1,307.40.