Home Business Gold hits near one-year low on dollar strength, imminent rate hikes

Gold hits near one-year low on dollar strength, imminent rate hikes

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Gold prices fell on Thursday to their

lowest in nearly a year, as an elevated U.S. dollar and

prospects of more interest rate hikes by major central banks to

combat soaring inflation weighed on bullion’s appeal.


* Spot gold was down 0.2% at $1,693.90 per ounce by

0052 GMT, after falling to its lowest since early August 2021 at

$1,691.40 in early Asian trade.

* U.S. gold futures fell 0.5% to $1,692.10 per ounce.

* The dollar held below two-decade highs against its

rivals, making greenback-priced bullion more expensive for

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buyers holding other currencies.

* The European Central Bank will raise interest rates for

the first time in 11 years on Thursday with a

bigger-than-flagged move seen as increasingly likely as

policymakers fear losing control of runaway consumer price


* The U.S. Federal Reserve is widely expected to raise

interest rates by 75 basis points at its policy meeting next


* British inflation in June surged to a 40-year peak,

bolstering chances of a half-percentage-point Bank of England

rate hike next month.

* Although gold is seen as a hedge against inflation, rising

interest rates increase the opportunity cost of holding bullion,

which pays no interest.

* SPDR Gold Trust , the world’s largest gold-backed

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exchange-traded fund, said its holdings fell 0.3% to 1,005.87

tonnes on Wednesday from 1,009.06 tonnes on Tuesday.

* European Union diplomats meeting in Brussels on Wednesday

agreed a new round of sanctions against Moscow for invading

Ukraine, including a ban on importing gold from Russia.

* Spot silver was flat at $18.66 per ounce, platinum

eased 0.2% to $856.12, and palladium rose 0.2% to



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monetary policy decisions

(Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu




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