All Things Newz
Business

Gold slumps on dollar rally, Fed rate-hike worries


Article content

Gold prices fell to near a one-month low

on Monday amid sharp declines in precious metals due to a

stronger dollar, with looming Federal Reserve interest rate

hikes also denting bullion’s appeal.

Extending losses into a sixth session, spot gold was

down 0.6% at $1,736.74 per ounce by 1:51 p.m. ET (1751 GMT)

after hitting its lowest since July 27 earlier in the session.

U.S. gold futures settled down 0.8% at $1,748.4.

The dollar hit a fresh five-week high versus major

currencies, making greenback-priced gold more expensive for

Advertisement 2

Article content

overseas buyers.

Gold is under pressure from the dollar and market

expectations that Fed Chair Jerome Powell will reinforce the

U.S. central bank’s hawkish stance in a speech at the Jackson

Hole, Wyoming central banking conference later this week, said

Daniel Ghali, commodity strategist at TD Securities.

Prices could dip below $1,700 after the Jackson Hole

conference, Ghali added. Higher interest rates raise the

opportunity cost of holding gold, which does not pay any

interest.

According to economists in a Reuters poll, the Fed is likely

to raise its interest rate by 50 basis points in September amid

expectations U.S. inflation has peaked and on growing recession

worries.

In the short term, gold could face pressure again as the Fed

Advertisement 3

Article content

is likely to raise rates further until the end of the year, but

once the rate hike cycle comes to an end, gold should start to

rise, Commerzbank said in a note.

According to data on Friday, speculators also cut their net

long COMEX gold and net short silver position in the week to

Aug. 16.

Spot silver fell 0.3% to $18.96 after touching its

lowest in four weeks earlier in the session.

“Silver prices have been underperforming in the recent

trading sessions, this reflects a slowing industrial demand for

silver as well as deteriorating speculative appetite,” Ghali

said.

Platinum dropped 2.3% to $875.42, while palladium

sank 6.2% to $1,992.18.

(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Paul

Simao, Bernadette Baum and Vinay Dwivedi)

Advertisement

Comments

Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.



Source link

Related posts

Weaker Canadian dollar needs higher interest rates: Tiff Macklem

KuCoin Partners with Talos, Facilitating Digital Asset Trading Tech Market Adoption

Osisko Development Announces Filing of the Technical Report for the San Antonio Mineral Resource Estimate, Sonora State, Mexico