Gold falls amid signs of US interest rate hike

Gold prices fell on Thursday from their highest levels in more than a month, as comments from Federal Reserve officials pointed to further interest rate hikes despite signs of easing inflation in the world’s largest economy.

Gold is highly affected by rising US interest rates, because they increase the opportunity cost of holding non-returning bullion.

Spot gold fell 0.3 percent to $1,786.79 an ounce by 0712 GMT, after hitting its highest level since July 5 at $1,807.79 on Wednesday.

US gold futures fell 0.6 percent to $1,802.10.

The benchmark 10-year US Treasury yield rose to 2.7910 percent, after falling to 2.6740 percent on Wednesday.

The data showed that US consumer prices did not rise in July due to the sharp drop in the cost of gasoline, raising hopes that the Federal Reserve will take time to raise interest rates in the future.

However, Fed policymakers have indicated that they will continue to tighten monetary policy until price pressures are fully contained.

Gold’s losses were limited by the dollar’s decline of 0.1 percent against its competitors, after it fell to its lowest level in a month and a half in the last session.

As for other precious metals, silver fell in spot transactions 0.3 percent to $ 20.53 an ounce, while platinum rose one percent to $ 951, and palladium settled at $2240.64.