Gold down on strong dollar, rate hike concerns ‎

Gold prices fell today, Tuesday, under pressure from the dollar’s rise, while the possibility of raising US interest rates to higher levels and for a longer period also affected the attractiveness of the non-yielding precious metal.

Spot gold prices plunged 0.3% to $ 1732.10 per ounce by 0736 GMT, after reaching its lowest level in a month at $ 1719.56 in the previous session. US gold futures also fell 0.3% to $1744.10.

The dollar index hovered near a two-decade peak on Monday.

It noteworthy that at a conference of central banks in Jackson Hole, Wyoming, the US Federal Reserve and the European Central Bank demonstrated a tough stance and pledged to make all possible efforts to rein in the relentlessly rising inflation even if growth was negatively affected by this.

While gold is considered a safe haven in times of economic uncertainty, higher interest rates increase the opportunity cost of holding gold.

Markets are now preparing for the possibility of a 75 basis point rate hike at the Federal Reserve’s September meeting.