Lowest gold price in four weeks

BENGALURU: Gold prices are near a four-week low as the strength of the US dollar limits demand for safe-haven assets, amid fears of an economic slowdown amid prospects of aggressive monetary policy tightening.

Spot gold rose 0.3 percent to $1,823.69 an ounce after falling to its lowest level since May 19 at $1,810.90 in early trade.

US gold futures fell 0.4 percent to $1,825.20.

Gold and palladium fell sharply as the dollar rose in anticipation of a significant US Federal Reserve (Fed) rate hike, reducing the appeal of gold and other precious metals.

The dollar is still seen as a major safe-haven asset option, approaching its highest level in two decades and pulling investors out of the gold market which is fixed on the price of the US currency.

Asian stock markets fell after Wall Street officially entered the bear market zone and bond yields hit their highest in two decades on fears that aggressive US interest rate hikes would plunge the world’s largest economy into recession.

Higher interest rates and returns on short-term US bonds increase the opportunity cost of holding gold, which is interest-free.

Meanwhile, spot silver was down 0.9 percent to $21.68 an ounce, platinum was down 0.6 percent to $967.67 and palladium was down 1.3 percent to $1,909.49.

Reuters

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