BENGALURU: Gold prices languished near a seven-month low on Tuesday, weighed down by a robust dollar and elevated bond yields as the likelihood of US interest rates staying higher for longer dominated sentiment.
Spot gold was down 0.3% at $1,822.42 per ounce at 11:38 a.m. EDT (1538 GMT), its lowest level since early March. US gold futures shed 0.4% to $1,840.00 per ounce. US job openings unexpectedly increased in August, pointing to tight labour market conditions that could compel the US Federal Reserve to raise interest rates next month.
“The JOLTS report has surprised the market as it raises prospects of another hike but also lowers expectation of a slowdown in the US economy, pressuring precious metals,” said Edward Moya, senior market analyst at OANDA.
Gold is considered a hedge against inflation and economic uncertainties. But higher interest rates raise the opportunity cost of holding bullion, which is priced in dollars and does not yield interest.