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Spot gold fell 0.6% at $1,894.96 per ounce as of 1001 GMT,
having dropped to $1,886.09, a low since Feb. 25. U.S. gold
futures slid 0.4% to $1,896.
"We are in an environment which is definitely not the best one
for gold," said Carlo Alberto De Casa, external market analyst
at Kinesis. He added that bullion is slowing down due to the
strength of the U.S. dollar and expectations of a hawkish
Federal Reserve policy.
The dollar index, which measures its performance against a
basket of six major currencies, scaled a post-March 2020 peak
driven by the prospect of aggressive U.S. rate hikes and
safe-haven flows fanned by slowing growth in China and Europe.
[USD/]
"Inflation pressure can be positive for gold if central banks
are unable to keep the rally of prices under control," De Casa
said.
Rising U.S. interest rates increased the opportunity cost of
holding non-yielding gold, while also boosting the dollar, in
which it is priced. The greenback is also seen as a rival
safe-haven asset to gold during economic and political crises.
"So, $1,900 is clearly a pivotal level for today's
session...Looking further out, it's not looking ideal at the
moment with the U.S. dollar at a 25-month high," trading firm
City Index's senior market analyst Matt Simpson said.
In other metals, spot silver rose 0.4% to $23.57 per ounce,
platinum eased 0.6% to $915.37 and palladium jumped 1.7% to
$2,224.07.
(Reporting by Eileen Soreng and Bharat Govind Gautam in
Bengaluru, additional reporting by Swati Verma, editing by Mark
Heinrich)
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