Gold is losing some luster amid investors’ assessment of the path of US interest rates

Gold recorded some decline in 19 limited transactions, Monday, June 19, under pressure from the strength of the dollar, as investors evaluate the future path of interest rates after the US Federal Reserve’s statements that hinted at future increases.

Spot gold prices fell 0.2% to $1953.69 an ounce.

US gold futures fell 0.2% to $1,966.30.

Fed officials signaled hawkishness in their first comments since the central bank kept interest rates unchanged at a meeting last week.

Gold recorded slight weekly losses last week, as dealers intensified bets on raising interest rates in July, with the US Federal Reserve halting the series of monetary tightening after 10 consecutive increases.

Although gold is used as a hedge against inflation, higher interest rates increase the opportunity cost of holding the non-yielding metal.

Traders now expect about 72% of US interest rate hikes in July, according to CME’s Videowatch tool.

The dollar index rose, but remained near a one-month low hit on Friday.

A stronger dollar would reduce the attractiveness of gold to buyers holding other currencies.

As for other precious metals, spot silver fell 0.5% to $24.02 an ounce, platinum fell 0.3% to $978.39, and palladium fell 0.5% to $1404.27.