Strength of USD putting pressure on gold

Gold continued its losses on Monday for the sixth session in a row, reaching its lowest level in about seven months in light of the continued rise of the dollar, traders’ evaluation of a major report on inflation in the United States, and their anticipation of a number of labor market data scheduled to be issued this week.

Gold fell in instant transactions 0.4 percent to $1,840.49 per ounce by 0545 GMT, its lowest level since March 10. US gold futures fell 0.5 percent to $1,856.20.

Last week, the precious metal recorded the largest weekly decline since June 2021, ending the third quarter with a decline of 3.7 percent.

The dollar stabilized near the highest level in ten months, while Treasury bond yields fell from the highest level in 16 years.

Data on Friday showed that core inflation in the United States fell in August and the average core personal consumption expenditures price index, a measure of inflation closely monitored by the Federal Reserve, approached its target rate of 2 percent over the past three months.

New York Federal Reserve Bank President John Williams said the central bank may stop raising interest rates as inflation pressures ease, which, although still high, are falling toward the official target.

Higher interest rates increase the opportunity cost of holding bullion, which is priced in dollars and does not generate returns.

As for other precious metals, silver fell in spot transactions 2.1 percent to the lowest level in more than six months at $21.69 per ounce, while platinum fell 0.4 percent to $900.71 and palladium fell 1.1 percent to $1,232.11.