Gold drops to 3-week low on U.S. dollar strength, rate-hike fears
Gold prices slipped to a three-week low
on Friday and were heading for their first weekly decline in
five, as a stronger dollar and prospects of more rate hikes by
the U.S. Federal Reserve dented bullion’s appeal.
* Spot gold was down 0.2% at $1,755.89 per ounce, as
of 0107 GMT, after falling to its lowest since July 29 at
$1,753.68 in early Asian trading. For the week so far, the metal
is down 2.5%.
* U.S. gold futures eased 0.1% to $1,769.20.
* The dollar surged to a one-month high against its
rivals, making gold more expensive for buyers holding other
* The Fed needs to keep raising borrowing costs to bring
high inflation under control, a string of U.S. central bank
officials said on Thursday, even as they debated how fast and
how high to lift them.
* St. Louis Fed President James Bullard said he is currently
leaning toward supporting a third straight 75-basis-point
interest rate hike in September.
* San Francisco Fed President Mary Daly said hiking rates by
50 or 75 basis points at the Fed’s next policy meeting on Sept.
20-21 would be a “reasonable.”
* Gold is highly sensitive to rising U.S. interest rates, as
these increase the opportunity cost of holding non-yielding
* Meanwhile, benchmark U.S. 10-year Treasury yields
were hovering close to a one-month high hit earlier
* In their July meeting minutes released on Wednesday, Fed
officials said the pace of future rate hikes would depend on
incoming economic data, as well as assessments of how the
economy was adapting to the higher rates already approved.
* Data on Thursday showed the number of Americans filing new
claims for unemployment benefits fell last week.
* SPDR Gold Trust , the world’s largest gold-backed
exchange-traded fund, said its holdings fell 0.32% to 985.83
tonnes on Thursday.
* Spot silver fell 0.4% to $19.44 per ounce, platinum
eased 0.3% to $908.50, and palladium slipped 0.5%
0600 UK Retail Sales MM, YY
0600 UK Retail Sales Ex-Fuel MM
(Reporting by Brijesh Patel in Bengaluru)