Gold is Heading For Its Worst Monthly Performance Since September

The price of gold fell on Monday and is heading to record the largest monthly decline since September, while the markets expect to raise the US interest rate on the back of economic data, and the rise of the dollar affected the price of gold.

Spot gold prices are trading today at $1790 an ounce.

The US Federal Reserve plans to raise interest rates in March, assuming that the economy is not significantly affected by the spread of the mutated Omicron from the Coronavirus and that it continues to grow at a healthy pace.

Although gold is a hedge against inflation, rising interest rates increases the opportunity cost of holding the precious metal, which does not generate returns.

The dollar index hovered around 18-month highs on Friday as traders awaited central bank meetings in Australia, Britain, and the European Union.

And the rise of the dollar makes gold more expensive for holders of other currencies.