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The financial markets’ focus is still on major central banks as the US dollar and Treasury yields continue to dictate their saying.
Gold prices encounter some pressure at the start of this week, earlier on the day, prices were sliding by 0.20% after falling from $1679 high to $1,659 low on the day and near a 29-month low scored on Friday. At the time of writing, the precious metal is trading at $1670.71 per ounce.
The US dollar and Treasury yields are still stronger in anticipation of the Fed’s next rate hike this week.
The sentiment surrounding surging inflation and tighter monetary policy continues to strip the opportunity cost of holding zero-yield precious metals. At the same time, the dollar remains close to two-decade highs, making dollar-priced gold more expensive for overseas buyers.
The dollar index was up 0.4% at 109.98, not far from 20-year high of 110.79 hit on September 7, before sliding to 109.766 at the time of writing
Risk-off sentiment is also contributing to a higher US dollar in the face of the aggressive tightening path that global banks are adopting as monetary policymakers try to contain uncomfortably high inflation.
