Gold prices fell to their lowest level in eight weeks yesterday, Thursday, amid the rise of the dollar and bets that the Federal Reserve (the US central bank) will raise interest rates by a large percentage to tame the rising inflation.
Spot gold fell 0.4% to $1,688.49 an ounce, following hitting its lowest level since July 21 earlier in the session.
US gold futures fell 0.6% to $1,698.10, according to Archyde.com.
The dollar index rose 0.2%, well below its two-decade high hit last week, while bigger-than-expected inflation data boosted bets for a significant tightening of monetary policy by the Federal Reserve.
Federal Reserve Fund futures are now priced on the basis of a 37% chance of the Federal Reserve raising interest rates by 100 basis points during next week’s monetary policy meeting.
Gold is usually considered a hedge once morest inflation, but it does not generate returns, so it is sensitive to interest rates and Treasury yields.
Meanwhile, IMF chief Kristalina Georgieva said on Wednesday that central bankers should persevere in the fight once morest large-scale inflation.
As for other precious metals, silver fell in spot transactions 1.3% to $19.44 an ounce, platinum fell 0.1% to $905.16, and palladium fell 0.8% to $2141.30.
