PRECIOUS-Gold pulled 1% lower by strong dollar, big Fed hike bets

By Reuters / October 10, 2022 / / Article Link

(Updates details, prices) *

Gold drops for a fourth consecutive session *

Thursday's U.S. inflation data on investors' radar *

Gold to stay under pressure in the short term - analyst

By Bharat Gautam Oct 10 (Reuters) - Gold prices fell more than 1% onMonday, as an elevated dollar and solidifying bets for anaggressive interest rate hike from the U.S. Federal Reservepushed the non-yielding bullion to its lowest in a week. Spot gold fell 1.4% to $1,670.89 per ounce by 13:52a.m. EDT (1752 GMT) while U.S. gold futures settled down2% at $1,675.2. Gold has now fallen for a fourth consecutive session, inpotentially its worst run since mid-August.

Rising interest rates and a strong U.S. dollar arecontinuing to pressure gold and are overwhelming any safe-havendemand currently arising from the latest escalation in theUkraine crisis, said David Meger, director of metals trading atHigh Ridge Futures. The dollar climbed to its highest since Sept. 29,making gold priced in the U.S. currency more expensive foroverseas buyers. Fed fund futures are now pricing in a 92% chance of a75-basis-point hike at the next Fed meeting. Higher interestrates increase the opportunity cost of holding zero-yieldbullion. Russia rained cruise missiles on busy Ukrainian cities onMonday in what the United States called "horrific strikes",killing civilians and knocking out power and heat with its mostwidespread air attacks since the start of the war. "We're back at $1,680 level again ... and gold will remainunder some downside pressure in the short term," said RossNorman, an independent analyst. Investors now look to key U.S. inflation data due later thisweek.

The Fed may still be able to lower inflation without a sharprise in unemployment even as it keeps raising interest rates,Chicago Fed president Charles Evans said on Monday, a rebuttalto arguments the U.S. central bank is pushing the world and theUnited States towards a potentially sharp downturn. Spot silver dropped 2.2% to $19.66 per ounce, andplatinum fell 1.2% to $901.06. Palladium gained0.2% to $2,186.03. (Reporting by Bharat Govind Gautam and Brijesh Patel inBengaluruEditing by Tomasz Janowski)

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