gold prices fell to a three-week low today, as the dollar’s rise and expectations of a US Federal Reserve interest rate hike dented the attractiveness of the yellow metal.
By 04:51 GMT, spot gold fell 0.3 percent to $1,752.89 an ounce, after falling to its lowest level since July 28 at $1,751.01 earlier in the session.
markets are expecting interest rates to rise more and of course a strong dollar is affecting gold prices at the moment,” said Brian, managing director of Gold Silver Central, a gold trader.
The dollar rose to a one-month high against rival currencies, making gold more expensive for buyers of other currencies. A number of US Federal Reserve officials said yesterday that the central bank needs to continue increasing borrowing costs to control high inflation.
Gold is strongly affected by the rise in US interest rates, which leads to an increase in the opportunity cost of owning the yellow metal, which does not yield a return. Among other precious metals, spot silver fell 0.9 percent to $ 19.35 an ounce and is heading to record the largest weekly percentage decline since late January. Platinum fell 0.4 percent to $907.84 an ounce, and palladium fell 0.3 percent to $2149.35.
During the week, the precious metal fell 2.7 percent, and is heading to record its first weekly decline in five weeks. US gold futures fell 0.3 percent to $1,766.20