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A
stronger dollar makes gold expensive for overseas buyers, while
higher Treasury yields raise the opportunity cost of holding
zero-yield bullion.
Spot gold was down 0.7% at $1,798.80 per ounce as of 0920 GMT,
after hitting its lowest since Jan. 31 at $1,786.60 earlier in
the session. U.S. gold futures fell 0.6% to $1,798.
"Spot gold may not stray far from $1,800, suppressed by the
might of King Dollar and elevated Treasury yields, while
supported by the looming prospects of a recession," said Han
Tan, chief market analyst at Exinity.
Gold prices are down over 13% since scaling a near-record peak
of $2,069.89 an ounce in March as the U.S. dollar and Treasury
yields were bolstered by aggressive rate hike bets. [USD/] [US/]
"Having now fallen through the psychologically important
threshold of $1,800 an ounce and with the hawkish monetary
policy more likely to strengthen than weaken, it is hard to see
where gold can now find a short-term foothold," Rupert Rowling,
market analyst at Kinesis Money, said in a note.
The U.S. dollar consolidated gains near a two-decade peak while
equities, oil prices and riskier currencies took a hit after an
unexpectedly weak economic data from China highlighted fears
about a slowdown in growth. [MKTS/GLOB]
Silver has found itself caught up in the broader sell-off in
equities and gold, being punished for being an industrial metal
at a time when growth forecasts are being trimmed and for its
lack of yield at a time of rising interest rates, Rowling added.
Spot silver gained 0.2% to $21.11 per ounce, after slumping to
its lowest since July 2020 in the last session.
Platinum fell 0.4% to $935.18 and palladium rose 0.9% to
$1,960.58.
(Reporting by Swati Verma in Bengaluru; Editing by Vinay Dwivedi)
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