Gold price dips to 6-yr low

Gold dipped to its lowest level in nearly six years on Friday and was heading for a sixth straight weekly decline under pressure from a firm dollar and prospects of a US interest rate rise next month, miningweekly has reported.

Spot gold hit $1 055.99 /oz, its lowest since February 2010, and was down 1.5% at $1 057.27 by 1314 GMT.

The metal was down 1.9% for the week. US gold futures also fell 1.3% to $1 055.90 /oz and were also headed for a sixth consecutive weekly decline.

Gold was undermined by a firm dollar, trading near an eight-month high against a basket of major currencies, mostly boosted by euro and Swiss franc weakness. The dollar-denominated metal becomes more expensive for foreign investors when the US currency rises.

"The dollar is bid and you have the inverse relationship with gold simply because the Fed is going to be tightening," Societe Generale analyst Robin Bhar said.

"The omens are not positive for gold in the lead-up to the December rate meeting." The Federal Reserve is widely expected to raise US rates for the first time in nearly a decade when it meets next on December 15-16.

Higher rates would rise the opportunity cost of holding non-yielding gold and could dent demand and boost the dollar. "Once again, gold is unable to find a bid. Any small rally that we see is being sold into," said a Sydney-based precious metals trader.

Buying in China has been good but has been unable to support prices, the trader said. Premiums on the Shanghai Gold Exchange, a proxy for demand in China, were trading at $5-$6 /oz, versus $3-$4 at the beginning of the month.

However, other physical demand indicators were not upbeat. India's gold buying in the key December quarter is likely to fall to the lowest level in eight years, hurt by poor investment demand and back-to-back droughts that have slashed earnings for the country's millions of farmers.

China's net gold imports from main conduit Hong Kong fell in October from a 10-month high reached in the previous month, data showed on Thursday.

Precious metals funds posted their biggest net outflow last week in around four months, according to Bank of America Merrill Lynch. In other precious metals, silver, platinum and palladium were all heading for weekly declines. Silver was down 1.2% to $14.08 /oz, platinum was down 1.2% at $843.25 and palladium dropped 1.3% to $548.70.