Gold prices hurtles toward fifth weekly dip as dollar strengthens

By Arundhati Sarkar

(Reuters) – fell on Friday and were poised for a fifth straight weekly loss, as expectations of a sizeable rate hike by the U.S. Federal Reserve powered the dollar and eroded bullion’s appeal.

Spot gold was down 0.3% at $1,704.99 per ounce, as of 0916 GMT, and lost 2.2% so far this week. U.S. gold futures eased 0.2% to $1,701.90.

The dollar held at a two-decade high, making greenback-priced bullion expensive among overseas investors. [USD/]

Gold looks to be in a free-fall, and typically buyers will restrain themselves until the price finds some decent support, said independent analyst Ross Norman.

With the U.S. dollar undergoing an epic rally, it’s apparent that investors see it as the ‘go-to’ safe-haven asset, Norman said, adding, there’s “some significant redemptions in the gold ETF on a daily basis as stale institutional longs liquidate.” [GOL/ETF]

Two of the Fed’s most hawkish policymakers said on Thursday they favoured another 75-basis-point interest rate increase this month.

Investors now await U.S. monthly retail sales due at 1230 GMT.

Market have more or less priced in a 100-point rate hike, and “as for retail sales, the trend is more important than a one-off number,” StoneX analyst Rhona O’Connell said.

Higher interest rates raise the opportunity cost of holding non-yielding bullion.

The market also took stock of the EU’s plans to adopt its seventh package of sanctions against Russia, which will add a ban on import of Russian gold.

“The EU sanctions against Russian gold will have rather limited impact. I think this move as more of a gesture. Likely the Russians will be able to find buyers outside the EU quite satisfactorily,” Norman said.

Spot silver fell 0.2% to $18.35 per ounce, and lost about 5% this week, in what could be its seventh straight weekly loss.

Platinum was down 0.3% at $841.36 per ounce, while palladium dropped 0.8% to $1,882.56.


(Reporting by Arundhati Sarkar in Bengaluru; Editing by Sherry Jacob-Phillips)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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