Gold down on higher dollar, Fed’s rate hike fears

Gold prices are down on Friday, July 22, as the attractiveness of the yellow metal declined due to the rise in the dollar and fears of a sharp interest rate hike by major central banks in order to curb inflationary pressures.

Spot gold fell 0.2% to trade at $ 1714.72 per ounce ounce, and prices dipped to the lowest level in more than a year at $1680.25 yesterday, Thursday, before closing up by 1.3%.

Gold is still set to achieve its first weekly gain in 6 weeks, up nearly 0.5%.

US gold futures rose 0.1% to $1,714.90 an ounce.

The dollar rose 0.2% against rival currencies, which makes gold priced in the US currency more expensive for buyers of other currencies.

It should be noted that the European Central Bank joined with its global peers in the fight against soaring inflation by raising interest rates more than expected on Thursday, even as the euro zone economy suffered from the impact of the Russian war on Ukraine.

The US Federal Reserve’s policy meeting is scheduled for next week and policy makers are expected to raise interest rates by 75 basis points.

Thursday’s data showed that the number of Americans who filed for unemployment benefits last week rose to an 8-month high, in the latest indication that the economy is slowing under the weight of strong interest rates and inflation.