# Gold Declines

Gold prices declined today, Monday, as the dollar rose following the release of a new set of data that heightened concerns that central banks worldwide will continue to raise interest rates to contain inflation. The price of gold fell by 0.1% to $1853.19 per ounce as of 0037 GMT, after reaching its highest level since February 15 on Friday. U.S. gold futures rose by 0.3% to $1859.60. The dollar index increased, making gold less expensive for buyers holding other currencies. Data released on Friday showed steady growth in the U.S. services sector in February, with new orders and employment rising to over their highest levels in a year, indicating continued economic expansion in the first quarter. Mary Daly, President of the Federal Reserve Bank of San Francisco, stated on Saturday that if inflation and labor market data continue to rise more than expected, it will be necessary to raise interest rates and maintain this level longer than policymakers at the Federal Reserve predicted in December. European Central Bank President Christine Lagarde noted that core inflation in the Eurozone will remain high in the near term, making a 50 basis point rate hike by the European Central Bank later this month increasingly certain. Although gold is considered a hedge against inflation, rising interest rates to reduce price pressures increase the opportunity cost of holding gold, which does not yield returns. The price of silver in spot trading fell by 0.2% to $21.20 per ounce, while the price of platinum dropped by 0.7% to $970.84, and the price of palladium fell by 0.6% to $1443.65.