Gold prices fell on Monday, as the dollar held on to gains following U.S. Federal Reserve Chair Jerome Powell‘s signal that the central bank will raise interest rates further to tame sky-high inflation.
FUNDAMENTALS
Spot gold fell 0.3% to $
U.S. gold futures were down 0.3% at $1,745.3.
The dollar index held close to a two-decade high of 109.29 touched last month, making the bullion expensive for those holding other currencies. [USD/]
Americans are headed for a painful period of slow economic growth and possibly rising joblessness as the Fed raises interest rates to fight high inflation, Powell warned on Friday at the Jackson Hole central banking conference in Wyoming.
Higher interest rates increase the opportunity cost of holding non-yielding bullion, while boosting the dollar.
Central banks around the world risk losing public trust and must now act forcefully to combat inflation, even if that drags their economies into a recession, European Central Bank board member Isabel Schnabel said on Saturday at the symposium.
Speculators cut their net long COMEX gold position by 15,910 contracts to 30,326 in the week to Aug. 23, data from the U.S. Commodity Futures Trading Commission showed. [CFTC/]
Spot silver fell 1% to $18.69 per ounce, platinum slipped 1% to $855.27 and palladium was flat at $2,110.19.