Gold stabilizes as central banks prepare to hike rates

Gold prices settled near one-week lows on Tuesday as investors expected central banks’ plans to tighten monetary policy to keep interest rates high for an extended period, which in turn would raise US bond yields and the dollar.

The price of gold did not witness little change in spot trading, recording 1841.49 dollars per ounce by 0701 GMT, after it fluctuated within a limited range that did not exceed eight dollars.

And earlier in the session, gold recorded $ 1836.10 an ounce, its lowest level since the first of June. US gold futures settled at $1,843.70 an ounce.

The dollar rose while US 10-year bond yields rose to their highest in a month.

Analysts at JP Morgan expected the dollar to fall to an average of $1,800 in the third quarter, amid an expected rebound in investor risk appetite and a continued rise in US bond yields.

The Federal Reserve is on course to raise rates by half a percentage point in June and July. The European Central Bank will meet this week with expectations that it will raise rates this year.

Raising the interest limits the demand for buying gold, as it increases the opportunity cost of buying the metal that does not generate a return.

With regard to other precious metals, the price of platinum fell 1.4 percent to $ 1002.89 an ounce and palladium rose 0.5 percent to $ 2011.59 an ounce. Silver fell 0.6 percent to $21.92 an ounce.