Salem Radio Network News Wednesday, July 6, 2022

Business

Gold slides to 3-1/2-month low as dollar strength slams demand

By Bharat Gautam

(Reuters) – Gold prices fell more than 1% on Monday to their lowest level since late January, as a stronger dollar continued to hammer demand for greenback-priced bullion.

Spot gold fell 0.8% to $1,797.82 per ounce, by 0815 GMT. U.S. gold futures dropped 0.6% to $1,797.40.

Earlier in the session, gold prices dropped 1.4% to their lowest level since Jan. 31 at $1,786.60. On Friday, they posted their fourth consecutive weekly decline.

“It’s not looking great for gold bugs right now… the momentum clearly favours a further downside,” City Index’s senior market analyst Matt Simpson said.

The U.S. dollar consolidated gains near a two-decade peak as poor Chinese economic data hurt cyclical currencies, including the British pound and the Australian dollar, making rival safe-haven gold less attractive for buyers holding other currencies. [USD/]

“If sentiment fails to improve and stocks move lower, there’s a decent chance it will drag gold with it as investors move to cash,” Simpson said.

Asian share markets stumbled after shockingly weak data from China underlined the deep damage lockdowns are doing to the world’s second-largest economy. [MKTS/GLOB]

Inflation will need to move lower for “several months” before Federal Reserve officials can safely conclude it has peaked, Cleveland Fed president Loretta Mester said on Friday, adding she would be ready to consider faster rate hikes by the September Fed meeting if the data does not show improvement.

The U.S. central bank hiked rates for the first time in the pandemic era in March – by 25 basis points – as it sought to tighten monetary policy.

Although seen as an inflation hedge, gold is sensitive to rising U.S. short-term interest rates and bond yields, which increase the opportunity cost of holding bullion.

Spot silver eased 0.2% to $21.02 per ounce, platinum slipped 0.5% to $934.16, and palladium retreated 1.3% to $1,918.59.

(Reporting by Bharat Govind Gautam in Bengaluru; editing by Uttaresh.V, Aditya Soni and Subhranshu Sahu)

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