NEW YORK: Gold prices slipped to their lowest in over a week on Monday as the dollar extended gains, while the market’s attention turned to the US Federal Reserve’s November meeting minutes due this holiday-shortened week.
Spot gold fell 0.7% to $1,737.27 per ounce by 10:19 a.m. ET (1519 GMT), after earlier hitting its lowest level since Nov. 10 at $1,735.90. US gold futures fell 0.9% to $1,739.10.
“Overall, the general macro environment still is higher interest rates, which is a negative for the precious metals as central banks continue to look to increase interest rates,” said Chris Gaffney, president of world markets at TIAA Bank.
The dollar rose 0.7%, weighing on the yellow metal by making it expensive for overseas buyers.
The Fed’s November meeting minutes are due on Wednesday, with most traders betting on a 50-basis point hike in the December meeting, and some seeing 24.2% chance of a 75-bps hike following recent comments by Fed officials.
Higher interest rates sour the appeal of gold, traditionally a hedge against inflation, as they raise the opportunity cost of holding bullion which yields no interest.
“Technically, the gold futures bulls have lost their slight overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $1,800,” Jim Wycoff, senior analyst at Kitco Metals, said in a note.
Investors also kept track of the economic fallout from fresh COVID-19 restrictions in top bullion consumer China, where physical gold premiums fell sharply last week as buying slowed.
“China in particular is an active market for precious metals and if they continue to lock down, that’s negative for the overall economic environment and less money to spend in China for investment purposes,” Gaffney highlighted.
Elsewhere, spot silver fell 0.8% to $20.75 per ounce, platinum rose 0.2% to $979.00 and palladium dropped 5% to $1,839.25.
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