Gold falls as the dollar rises to its highest level in more than two years

Gold prices fell on Wednesday as the dollar rose to its highest level in more than two years to pressure demand for the precious metal, which is denominated in the US currency.

And gold fell in spot transactions 0.6 percent to $ 1893.70 an ounce by 0809 GMT.

And US gold futures fell 0.3 percent to $ 1898.60 an ounce.

The dollar remained at its highest level since the early days of the pandemic and is heading for its best month since 2015, buoyed by the prospect of sharp interest rate increases in the United States and safe-haven inflows sparked by slowing growth in China and Europe.

And the rise of the dollar makes gold less attractive to owners of other currencies. The US currency is also seen as a strong competitor to gold for safe-haven status during economic and political crises.

The news from Russia provided some support for gold on Tuesday as investors sought it as a safe haven, but the Ukraine crisis has not been as supportive of bullion lately as it was a few weeks ago, and demand is unlikely to continue because of it during the week, Simpson said.

Russia’s energy giant Gazprom said it had halted gas supplies to Bulgaria and Poland for not paying for gas in rubles, the Kremlin’s strongest response yet to Western sanctions over the conflict in Ukraine.

Most of the Asian stock indices declined as growing concerns about the global economy prompted investors to dump riskier assets and resort to safe havens such as the US dollar and government bonds.

Silver fell in spot transactions 0.2 percent to $23.43 an ounce, and platinum lost 1.3 percent to $920.23. Palladium also fell 0.1 percent to $2,183.36.