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Gold hits over three-week low on strong dollar - Dailyforextrading

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Gold hits over three-week low on strong dollar - Dailyforextrading

Gold prices fell for a sixth straight session on Monday to hit their lowest in more than three weeks, weighed down by a robust dollar and expectations of further interest rate hikes from the U.S. Federal Reserve to tame surging inflation.

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Spot gold was down 0.1% at $1,746.06 per ounce, as of 0131 GMT, after hitting its lowest since July 28 at $1,743.83 in early Asian trading. The metal lost nearly 3% last week.

U.S. gold futures eased 0.2% to $1,758.80. The dollarrose 0.1% to a more one-month high against its rivals, making gold more expensive for buyers holding other currencies.

The Fed will raise rates by 50 basis points in September amid expectations inflation has peaked and growing recession worries, according to economists in a Reuters poll.

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Traders are now pricing in around a 46.5% chance of a 75-basis-point rate hike in September and a 53.5% chance of a 50-bp increase.

The U.S. central bank needs to keep raising borrowing costs to bring high inflation under control, a string of its officials said last week.

Gold is highly sensitive to rising U.S. interest rates, as these increase the opportunity cost of holding non-yielding bullion.

Focus this week will be on comments by Fed Chair Jerome Powell when he addresses an annual global central banking conference in Jackson Hole, Wyoming, on Friday.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.32% to 989.01 tons on Friday from 985.83 tons on Thursday.


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Gold demand in India improved last week as domestic prices dropped to a more than two-week low, while volumes were somber in other Asian centers. Spot silver gained 0.2% to $19.06 per ounce, platinum fell 0.3% to $893.38, and palladium rose 0.2% to $2,129.21. Source: CNBC

 

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