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Gold falls for sixth day to hit over 3-week low on dollar rally

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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 amid expectations of more rate

hikes from the U.S. Federal Reserve to tame surging inflation.

Spot gold was down 0.4% at $1,741.79 per ounce, as of

0700 GMT, its lowest since July 28.

U.S. gold futures fell 0.4% to $1,755.80 per ounce.

“The upward resumption in the U.S. dollar will of course be

weighing on the gold market, but it seems to be more aligned

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with the simultaneous sell-off seen across bonds, stocks and

currencies,” said Clifford Bennett, chief economist at ACY

Securities.

“Wherever there had been a period of false hopes such as the

Federal Reserve slowing, those expectations appear to be

immediately evaporating.”

The dollar rose to a more than one-month high against

its rivals, making gold more expensive for buyers holding other

currencies.

Benchmark 10-year Treasury yields rose to their

highest in a month, increasing the opportunity cost of holding

non-yielding gold.

The Fed will likely 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 after recent hawkish remarks from Fed officials.

Focus this week will be on comments by Fed Chair Jerome

Powell when he addresses the annual global central banking

conference in Jackson Hole, Wyoming, on Friday.

Gold is highly sensitive to rising U.S. interest rates, as

these increase the opportunity cost of holding non-yielding

bullion.

Speculators cut their net long COMEX gold position in the

week to Aug. 16, data showed on Friday.

Elsewhere, spot silver eased 0.2% to $18.98 per

ounce, platinum fell 1.1% to $886.01, while palladium

rose 0.5% to $2,135.27.

(Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu

Sahu and Rashmi Aich)

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