Gold prices fall as rates rise in July

Gold prices fell on Monday as higher interest rates made the precious metal less attractive but the dollar’s decline helped hold gold above the $1800 support.

Spot gold fell 0.2 percent to $1,806.58 an ounce by 1121 GMT, after touching a five-month low of 1,783.50 on Friday. US gold futures rose 0.3 percent to $1,806.50 an ounce.

The US dollar fell 0.3 percent, but remained close to its highest level in 20 years, which it touched last month.

A lower dollar makes gold less expensive for holders of other currencies.

The Federal Reserve is expected to raise the interest rate by another 75 basis points this month.

The European Central Bank is expected to closely follow its global peers. Eurozone inflation hit a new record in June as price pressures increased.

As for other precious metals, silver fell in spot transactions 0.2 percent to $ 19.84 an ounce, approaching its lowest level in two years.

Platinum fell 0.7 percent to $882.73. And palladium fell 0.4 percent to 1951.87 dollars.