Gold loses some shine as investors assess US interest rate ‎outlook

Gold recorded some decline in limited trading today, Monday, under pressure from the strength of the dollar, as investors evaluate the future path of interest rates after statements by the Federal Reserve (US Central Bank) that hinted at future increases.

According to Reuters, gold prices fell in spot trading by 0.2 percent to $1953.69 an ounce by 0715 GMT. US gold futures fell 0.2 percent to $1,966.30

Federal Reserve officials waved monetary tightening in their first comments since the central bank kept interest rates unchanged at a meeting last week.

“Gold spent most of June in a range between $1935 and $1970, and with no clear catalyst on the horizon, traders prefer to trade in a limited range and not commit to gains,” said Matt Simpson, senior market analyst at City Index.

US stock markets are closed on Monday for a holiday

Gold recorded slight weekly losses last week, as dealers intensified bets on raising interest rates in July, with the Federal Reserve stopping the series of monetary tightening after ten consecutive increases.

Although gold is used as a hedge against inflation, the rise in interest rates increases the opportunity cost of owning the non-returnable metal.

Traders now expect about 72 percent of a rate hike in US interest rates in July, according to CME’s VideoWatch tool.

The dollar index rose, but remained near the one-month low it hit on Friday. A strong dollar would reduce the attractiveness of gold to buyers holding other currencies

As for other precious metals, silver fell in spot transactions by 0.5 to 24.02 dollars an ounce, and platinum fell 0.3 percent to 978.39 dollars, and palladium fell 0.5 percent to 1404.27 dollars.