Gold crept lower on Monday, after posting its worst week in five, under heavy dollar pressure as traders await more signals on central banks’ interest rate strategy.
Spot gold fell 0.3 percent to $1,744.83 an ounce by 06:50 GMT. GCv1 US gold futures fell 0.5% to $1,746.20.
Bullion fell 1.2% last week, its worst level since it ended on Oct. 14, though it climbed to a peak since mid-August on Nov. 15.
With no major economic news to animate sentiment in Asia, “traders are bullish on the greenback after hawkish comments from US Federal Reserve members last week, weighing on gold,” said City Index analyst Matt Simpson.
The dollar index rose, making gold less attractive to overseas buyers.
Gold could test the $1,735 and $1,729 support levels ahead of the minutes of the latest Federal Reserve meeting on Wednesday. Simpson added that there is a possibility that the dollar will continue to rise, if it is more hawkish than expected before Thanksgiving in the United States (holiday) on Thursday.
Atlanta Federal Reserve Chairman Rafael Bostick said Saturday that he is willing to “walk away” from raising interest rates by three-quarters of a point at the Fed’s December meeting. But the central bank is still expected to raise interest rates by 50 basis points, a view that other Fed officials have recently endorsed.
“Investors remain very focused on the interest rate cycle, and recent comments by Fed officials have renewed bearish sentiment (in gold),” said Michael Langford, director of corporate advisory firm AirGuide.
Langford added, “Watch gold trading between $1,680 and $1,740 over the next week.”
High interest rates discourage investing in unprofitable gold.
Investors also kept a close tab on the economic fallout from the new COVID-19 restrictions in China, the bullion’s largest consumer.
Chinese gold premiums fell sharply last week as buying slowed.
Spot silver fell 0.6 percent to $20.79 an ounce, platinum fell 0.8 percent to $968.74, and palladium fell 0.9 percent to $1919.90.