The drop in the price of bullion, considered a safe haven asset, occurs amid the rebound in the price of the dollar that climbed to a maximum not seen since January 2017, driven by the prospect of aggressive rises in the rates in United States.
The Fed is expected to raise interest rates by 50 basis points at its meeting on May 3-4.
“The rise in US rates raises the opportunity cost of holding gold, which does not pay interest, while boosting the dollar, the currency in which it is quoted. The greenback is also considered a safe-haven asset rival to the gold during economic and political crises,” the traders explained.
“We see that there are few agents left wanting to buy gold”analysts at TD Securities said in a note.
Among other precious metals, spot silver fell 0.4% to $23.40 an ounce, having earlier bottomed since February 15. Platinum was down 0.3% to $918.04 and palladium was up 1.2% to $2,211.88.
Source: Ambito
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