Spot gold fell 1.2% to $1,780.99 per ounce., after reaching a low not seen since August 8 earlier in the session. US gold futures closed down nearly 1% at $1,798.10.
The dollar index rose 0.8%, making gold and other dollar-priced commodities more expensive for foreign buyers.
“Gold has been hovering around $1,800, and today a stronger dollar is putting pressure on the metal and the entire commodity complex”said Bob Haberkorn, senior market strategist at RJO Futures. “It’s a cautious trade right now in gold as the Fed will continue to raise rates…investors do see rate hikes on the horizon.”
Investors await the minutes of the Fed’s July meeting on Wednesday for clues about the likely magnitude of rate hikes in the coming months. Higher rates tend to increase bond yields, raising the opportunity cost of holding non-returning bullion.
Gold and silver prices also fell on demand concerns after weak economic data from China, Jim Wyckoff, a senior analyst at Kitco Metals, said in a note.
Industrial production in China, the world’s top gold consumer, expanded 3.8% in July from a year earlier, slowing from a 3.9% rise in June.
Bullion attracts safe-haven flows during recession concerns, but a slowing economy could also potentially lead to weak demand for physical gold.
Among other precious metals, lSpot silver fell 2.5% to $20.29 per ounce, platinum fell more than 2.9% to $934.16, and palladium fell 3.1% to $2,153.26. Dollars.
Source: Ambito
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