Gold is heading towards the largest decline in 20 months

Gold prices fell on Tuesday, heading towards their largest monthly loss since June 2021, with the decline in the attractiveness of the non-yielding metal, in light of expectations that the Federal Reserve will raise interest rates soon.

Spot gold fell 0.3 percent to $1,811.74 an ounce by 0735 GMT, after hitting a two-month low on Monday.

US gold futures fell 0.4 percent to $1,817.30 an ounce.

Gold is seen as a hedge against inflation, but raising interest rates to curb inflation increases the opportunity cost of holding it.

The yellow metal has lost about six percent so far this February, recording a sharp decline from what it was earlier this month when it recorded its highest level since April 2022.

Markets expect the Federal Reserve’s interest rate target to peak at 5.415 percent in September.

And silver in the spot market fell 0.2 percent to $ 20.58 an ounce, on its way to recording the largest monthly loss since September 2020.

Platinum rose 0.1% to $939.33, and palladium rose 0.2% to $1,432.84 an ounce. The two metals are expected to record a monthly decline in prices.