Gold prices declined, nearing their lowest levels in seven months on Wednesday, as the strength of the dollar and expectations of interest rate hikes negatively impacted the non-yielding metal. Spot gold fell by 0.2% to $1,760.90 per ounce by 10:53 GMT after dropping about 2.6% the previous day. U.S. gold futures dropped 0.3% to $1,759.00 per ounce. The dollar, a competitor to gold as a safe-haven asset, rose, approaching its highest levels in 20 years, making dollar-denominated gold less attractive to buyers using other currencies. Gold is facing the impacts of rising interest rates and global bond yields, increasing the opportunity cost of holding the metal. Major central banks raised interest rates in June more than they had in the past 20 years, according to Reuters. With inflation continuing to rise to its highest levels in decades, further interest rate hikes are expected this year.
Regarding other precious metals, spot silver dropped 0.2% to $19.15 per ounce, while platinum fell 0.9% to $867.71. Palladium increased by 0.8% to $1,947.82.
