Gold hits over 1-month low as stronger dollar dents appeal
![Gold hits over 1-month low as stronger dollar dents appeal](https://media.shafaq.com/media/arcella/1632120755829.jpeg)
Shafaq News / Gold prices hit a more than five-week low on Monday as the dollar firmed with markets closely watching a U.S. Federal Reserve meeting for clues on when the bank will start tapering its crisis-era stimulus measures.
Spot gold XAU= fell 0.3% to $1,748.69 per ounce by 0312 GMT. Prices had touched $1,741.86 earlier in the session, their lowest level since Aug. 12.
U.S. gold futures GCv1 fell 0.1% to $1,749.00.
The dollar index =USD hit a near one-month high, hurting gold's appeal for holders of other currencies. USD/
The market is starting to think that a taper announcement could be imminent and that there could be a hawkish surprise in the dot plots, Stephen Innes, managing partner at SPI Asset Management, said.
Bullion is viewed as a hedge against the inflation and currency debasement likely from widespread stimulus. The Fed's tapering could tackle both those conditions, diminishing gold's appeal.
"It really looks like the markets turned quite bearish on gold, with some critical support levels ($1,780 and $1,750) giving away and I think this does open up for a test of $1,700," Innes said.
The Fed is expected to open the door to reducing its monthly bond purchases when it meets on Sept. 21-22, while tying any actual change to U.S. job growth in September and beyond.
The central bank is also likely to release fresh economic projections and a new read on officials' interest rate expectations.
Higher interest rates raise the opportunity cost of holding non-interest bearing gold.
Elsewhere, silver XAG= fell 1.2% to $22.13 per ounce, after earlier hitting its lowest level since November 2020 at $22.01.
Platinum XPT= slumped to a ten-month trough of $907.50 and was last down 2.8% at $914.54.
Palladium XPD= slipped 3.5% to $1,945.17.
Source: Reuters