Gold falls below $1,700 on bets on aggressive rate hikes

Shafaq News/ Gold prices briefly fell below the psychological $1,700 level on Thursday for the first time in six weeks as major central banks maintained an aggressive stance to fight inflation, weakening demand for bullion they pay interest.

Spot gold fell 0.5% to $1,702.19 per ounce by 1110 GMT, after touching $1,698.70, its lowest level since July 21. US gold futures were down 0.8% at $1,713.20.

“The direction of least resistance now appears to be down for precious metals as dollar strength continues to weigh on the market,” independent analyst Ross Norman said. “Gold is expected to turn lower to test the $1,680 level,” he added.

Gold prices have come under pressure as inflation hit multi-decade highs forcing central banks around the world to tighten monetary policy.

The metal has fallen more than $350 since scaling above the $2,000-per-ounce level in early March, posting a fifth monthly decline in August, its longest monthly losing streak since 2018.

The dollar was also firm near a two-decade high, piling pressure on gold by making it more expensive for buyers holding other currencies.

Attention now turns to the US weekly jobless claims due today at 1230 GMT and Friday’s Non-Farm Payrolls report.

“A strong labor market could pave the way for a more aggressive Federal Reserve, which is bad news for non-yielding gold,” Fiona Cincotta, senior financial markets analyst at City Index, said in a note.

Cash fell 1.6% to $17.68 an ounce, hitting its lowest level in more than two years. He was down 1.2% at $835.91 and he was down 1.4% at $2,055.25.

(Reuters)