Precise Investors Editorial Team
Spot gold was down 0.6% at $4,349.94 per ounce
Gold prices fell on Monday as expectations of further policy tightening by the US central bank this year and hawkish signals from other central banks strengthened the dollar.
Spot gold was down 0.6% at $4,349.94 per ounce by 1830 GMT, after dropping more than 1% to a session low of $4,322.19 earlier. US gold futures settled 0.9% lower at $4,383.90.
The dollar edged higher against six peers, extending gains after the central bank’s rate hike drove it up more than 1% last week. A stronger dollar makes bullion more expensive for holders of other currencies.
We are seeing some lingering concerns among the bulls about tighter US monetary policy, which has pushed the US dollar index to a more than two-month high on Friday. Those bearish elements are working against the precious metals, said Jim Wyckoff, a market analyst at American Gold Exchange.
Traders are pricing in an 88% chance of a US rate hike in December, according to the CME FedWatch Tool.
Bullion is traditionally considered an inflation hedge, but loses its appeal to yield-bearing assets in a high interest rate environment.
The US-Israeli war with Iran has pushed up energy prices, raising inflation concerns and reinforcing restrictive policy stances by central banks, leaving gold down 17% from its session high on February 27.
Analysts at TD Securities said they anticipate any near-term weakness in the precious metals market would be contained to only modest Commodity Trading Advisor selling, and would increasingly be seen as a buying opportunity for the yellow metal.
Comments (0)
Average Rating: No ratings yet/5 (0 reviews)
No comments yet. Be the first to comment!