Gold heads for recording largest decline in 20 months amid rate ‎hike fears

Gold prices fell today, Tuesday, heading towards their largest monthly loss since June 2021, with the decline in the attractiveness of the non-yielding metal, in light of expectations that the Federal Reserve (the US Central Bank) will raise interest rates soon.

According to “Reuters”, spot gold fell 0.3 percent to $1,811.74 an ounce by 0735 GMT, after hitting its lowest level in two months on Monday.

US gold futures fell 0.4 percent to $1,817.30 an ounce.

Gold is seen as a hedge against inflation, but raising interest rates to curb inflation increases the opportunity cost of holding it.

The yellow metal has lost about six percent so far this February, recording a sharp decline from what it was earlier this month when it recorded its highest level since April 2022.

Markets expect the Federal Reserve’s target interest rate to peak at 5.415 percent in September.

Silver in the spot market fell 0.2 percent to $ 20.58 an ounce, on its way to recording the largest monthly loss since September 2020.

Platinum rose 0.1% to $939.33, and palladium rose 0.2% to $1,432.84 an ounce. The two metals are expected to record a monthly decline in prices.