Gold fell on Monday as prospects of higher interest rates dimmed appeal for the non-yielding asset, but a softer dollar helped bullion cling above the $1,800 support level, reports Reuters.
Spot gold fell 0.2 per cent to $1,806.58 per ounce by 1121 GMT after touching a five-month low of $1,783.50 on Friday. US gold futures rose 0.3 per cent to $1,806.50.
The US dollar was down 0.3 per cent, but held close to a two-decade high touched last month.
A weaker dollar makes gold less expensive for those holding other currencies.
"Gold bulls are stuck in a quagmire of aggressive Fed policy actions, as the prospects of higher US rates erode support for the precious metal," said Han Tan, chief market analyst at Exinity.
The US Federal Reserve is expected to deliver another 75-basis-point (bps) interest rate hike this month.
The European Central Bank too is widely expected to follow its global peers. Euro zone inflation hit yet another record high in June as price pressures broadened.
"Markets have yet to fully price in a 75 bps hike at this month's FOMC meeting. If policymakers are forced to turn more aggressive in the face of unwavering inflation, that could spell another leg down for gold prices," Tan added.
Investors are also awaiting publication of minutes from last month's Fed meeting on Wednesday and US employment data on Friday.
Spot silver fell 0.2 per cent to $19.84 per ounce, trading near its lowest in two years.
Platinum fell 0.7 per cent to $882.73, while palladium fell 0.4 per cent to $1,951.87.
US markets are closed for the Independence Day holiday.
Gold edges lower as July rate hikes loom
FE Team | Published: July 04, 2022 21:37:56
Gold edges lower as July rate hikes loom
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