Gold falls 1.0pc as rate hike bets bolster dollar

FE Team | Published: June 13, 2022 22:51:16

LONDON, June 13 (Reuters): Gold fell 1 per cent on Monday after the dollar strengthened and Treasury yields rose as data showing surging inflation in the U.S. fuelled bets for steeper rate hikes from the Federal Reserve.
Spot gold fell 0.9 per cent to $1,853.99 per ounce by 1212 GMT, retreating from a more than one-month high of $1,877.05 touched earlier.
U.S. gold futures shed 1 per cent to $1,856.80.
Data on Friday showed U.S. consumer prices accelerated in May, marking its largest annual increase in nearly 40-1/2 years, making the case for aggressive rate hikes.
While inflation worries normally support gold, expected rate hikes to combat the rising prices tend to boost the dollar and reduce the appeal of non-yielding bullion.
Bullion is suffering due to the strength to the dollar, said Carlo Alberto De Casa, external market analyst at Kinesis.
But the fact that gold continues to hold above the $1,850 technical support level following the rebound on Friday shows there's still good interest from investors, De Casa added.
A volatile session on Friday led to gold falling to a near one-month trough before rebounding as economic concerns took centre stage.
U.S. 10-year Treasury yields and the dollar jumped, making gold more expensive for overseas buyers.