Gold falls to 3-week low on robust dollar, Fed rate-hike fears
Gold prices slipped to a three-week low
on Friday and were set for their first weekly drop 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 0.3% at $1,752.89 per ounce, as of
0451 GMT, after falling to its lowest since July 28 at $1,751.01
earlier in the session. For the week, the metal is down 2.7%.
U.S. gold futures fell 0.3% to $1,766.20.
“Markets are expecting interest rates to go further up and
of course the strong dollar is definitely weighing on gold
prices at the moment,” said Brian Lan, managing director at
dealer GoldSilver Central.
“Many are staying on the sidelines expecting gold prices to
go further down. Also, we’ve seen quite a bit of liquidation on
the ETF (exchange-traded fund) side.”
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
St. Louis Fed President James Bullard said he was currently
leaning toward supporting a third straight 75-basis-point rate
hike in September.
Gold is highly sensitive to rising U.S. interest rates, as
these increase the opportunity cost of holding non-yielding
In the July meeting minutes released on Wednesday, Fed
officials said the pace of future rate hikes would depend on
incoming economic data.
Data on Thursday showed the number of Americans filing new
claims for unemployment benefits fell last week, suggesting
labor market conditions remain tight despite a slowdown in
momentum due to higher interest rates.
Spot silver fell 0.9% to $19.35 per ounce and was on
track for its biggest weekly percentage fall since late-January.
Platinum fell 0.4% to $907.84 per ounce and palladium
slipped 0.3% to $2,149.35.
(Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu