In the wake of positive U.S. labor market statistics last week that increased the prospect of another interest rate hike by the Federal Reserve, gold weakened and came close to hitting a nine-month low on Monday.
By 11:08 GMT, spot gold was down 0.3% at $1,736.63 per ounce. To $1,734.00, U.S. gold futures saw a 0.5 percent decline.
Evangelista noted that geopolitical unrest and rising pessimism about the health of several Asian economies served to restrain gold price declines, and that bullion continues to serve as a refuge in difficult times.
The next important gold levels, according to the technical picture, are at $1,721.50 and $1,700, according to Otunuga. The dollar increased by 0.6% as a result of the rate-hike wagers, approaching the 20-year top reached in the previous session and lessening the allure of greenback-priced gold among foreign purchasers.
According to Lukman Otunuga, senior market analyst at FXTM, “Gold has stumbled into the new week fighting to heal serious wounds suffered by an appreciating dollar and increasing Treasury rates.”
Holding non-yielding bullion becomes more expensive when rates rise. A robust labor market is viewed as a sign of a healthy economy and provides the central bank with additional justification for another significant rate rise, according to economists.
Raphael Bostic, president of the Atlanta Fed, stated on Friday that he “totally” favors a further rate increase of 75 basis points at the Fed’s next policy meeting later this month.
This week, more policy tightening is anticipated from the Canadian and New Zealandia central banks. Evangelista noted that geopolitical unrest and rising pessimism about the health of several Asian economies served to restrain gold price declines, and that bullion continues to serve as a refuge in difficult times.
Spot silver declined 0.4 % to $19.22 per ounce, platinum down 2.2 percent to $877.13, and palladium sank 2.1 % to $2,136.60, among other precious metals.
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