© Reuters. Gold bars are displayed at the Ginza Tanaka store in Tokyo September 18, 2008. Gold prices eased into negative territory as concerted central bank action to address liquidity in the money markets helped risk appetite recovery, crimping safe haven buying of
(Reuters) – It fell more than 1.5 percent to its lowest level since April 2020 on Friday, as the allure of the yellow metal was undermined by a combination of factors starting with strength and rising yields, with the Federal Reserve (the US central bank) adopting a more hawkish stance aimed at curbing inflation.
And it fell 1.6 percent to $ 1644.04 an ounce by 1757 GMT, after it fell by about 1.8 percent to $ 1640.20 earlier in the session.
And US gold futures lost 1.5 percent, to settle at $1,655.60 an ounce.
And gold is heading to record the second weekly decline in a row, by 1.8 percent.
“We are seeing a relentless rally in the dollar here, and that will keep gold vulnerable in the short term,” said Edward Moya, chief analyst at Wanda.
“The economy is clearly heading into a recession. The downside risks are high and this continues to drive inflows into the dollar, which is bad news for gold.”
The dollar jumped to a new high, the highest in two decades, against rival currencies, making gold less attractive to holders of other currencies. The yield on the benchmark 10-year US Treasury bond reached its highest level since April 2010.
A number of central banks raised interest rates, following the impact of the US Central Bank, which raised interest rates for the third time in a row by 75 basis points.
Although gold is seen as a hedge in times of political and economic uncertainty, raising interest rates weakens its attractiveness because it does not generate any return.
As for other precious metals, it fell in spot transactions 4.1 percent to $18.84 an ounce, and it fell 4.8 percent to $2065.29. Platinum also fell 4.8 percent to $857.46. The three metals are heading to record a weekly decline.
(Prepared by Mustafa Saleh for the Arabic Bulletin)