Gold declines as concerns increase about rising interest rates

Gold prices fell today, Thursday, with the rise of the dollar, while a new set of global economic data reinforced investor concerns about interest rates remaining high for longer than expected.

By 0315 GMT, spot gold fell 0.2 percent to $1833.57 an ounce, after reaching the highest level in a week on Wednesday. US gold futures fell 0.3 percent to $1840.50.

According to “Reuters”, although it is considered a hedge against inflation, raising interest with the aim of curbing prices increases the opportunity cost of possessing the precious metal that does not yield a return.

The dollar index rose 0.1 percent, making the yellow metal more expensive for buyers holding other currencies.

Data on Wednesday showed manufacturing activity in the United States contracted for the fourth month in a row in February, but there were signs that factory activity was beginning to level off, with a measure of new orders climbing from the lowest level in more than two-and-a-half years.

Fed policymakers will present updated forecasts for the path of the interest rate and the economy at the end of their March 21-22 meeting.

Data on Wednesday also showed that consumer prices in Germany rose more than expected in February, after data released on Tuesday showed unexpected inflation in France and Spain, which reinforced expectations that the European Central Bank would raise interest rates.

Among other precious metals, silver fell in spot transactions by 0.5 percent, to $20.90 an ounce, and palladium lost 0.8 percent, recording $1,428.85.

Platinum fell 0.5 percent to $950.64, after hitting a three-week high in the previous session.