However, losses in gold were limited by growing pessimism about the state of some economies in Asia and geopolitical instability, said Ricardo Evangelista, senior analyst at ActivTrades, adding that bullion remains a safe haven in times of trouble. .
Looking at the technical picture, the next key levels for gold are $1,721.50 and $1,700, said Lukman Otunuga, Principal Markets Analyst at FXTM.
Taking advantage of bets on rate hikes, the dollar rose 0.6% to approach a 20-year high reached in the previous session, which reduced the attractiveness of gold – which is priced in dollars – among foreign buyers..
“Gold has stumbled into the new week, struggling to heal the deep wounds inflicted by the appreciating dollar and rising Treasury yields,” Otunuga said.
Interest rate hikes increase the opportunity cost of holding bullion, which does not earn interest. A strong labor market is seen as an indicator of a healthy economy and gives the central bank more ammunition for another big rate hike, according to analysts.
Atlanta Fed President Raphael Bostic said on Friday he “fully” supports another 75 basis point rate hike at the Fed’s next policy meeting later this month.
Among other precious metals, silver was down 0.4% at $19.22 per ounce, platinum was down 2.2% at $877.13 and palladium was down 2.1% at $2,136.60.
Source: Ambito
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