Gold dips on higher dollar, yields

Gold prices declined 1% on Thursday, as US dollar and treasury yields rose with expectations for gold already dented by fears that the US Federal Reserve will resort to a larger interest rate hike this month to tackle rising inflation.

According to “Reuters”, spot gold prices fell 1% to trade at $1718.69 per ounce by 0757 GMT. US gold futures also fell one percent to $ 1717.70.

The dollar hit a new record high in 20 years, hurting demand for gold priced in the US currency among buyers who own other currencies.

US 10-year Treasury yields have soared, denting the allure of non-fixed-yielding gold.

Data on Wednesday night showed that the annual consumer price index in the United States jumped 9.1 percent in June, the largest rise in more than four decades.

The dollar’s rise pushed gold prices to their lowest level in nearly a year on Wednesday after the inflation report, but the decline in the US currency helped the precious metal make a sharp recovery and end the session higher.

Expectations indicate that the Federal Reserve will intensify its moves to reduce inflationary pressures by raising the interest rate by 100 basis points at its next policy meeting on July 26-27.