Gold prices fall as the dollar strengthens towards a 20-year high

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Gold fell on Monday as a strong dollar pressured demand for bullion at the price of the greenback, with rising US Treasury yields weighing further on prices.

Spot gold was down 0.4% at $1,874.89 an ounce, 0252 GMT, while US gold futures also fell 0.4% at 1,874 $.80.

The dollar strengthened near recent 20-year highs against its rivals, making greenback-priced bullion less attractive to other currency holders.

“A decisive upside break of 104.00 by the dollar index should be enough for gold to retest support at $1,850” and then $1,835, said Jeffrey Halley, principal analyst at OANDA, adding that the greenback’s continued strength this week would push gold back towards $1,800. .

An unwinding of the weekend’s risk-hedging positioning may also have put pressure on gold, Halley said.

Benchmark 10-year U.S. Treasury yields hit their highest level since November 2018 on Monday, dragging gold prices to zero yield.

On Friday, two of the most vocal political hawks in the US Federal Reserve pushed back against the idea that the US central bank had missed the mark in the fight against high inflation, citing a tightening in financial conditions that began long before the Fed start raising interest rates in March. .

Although gold is considered a safe store of value in times of political and economic crisis, it is highly sensitive to rising US short-term interest rates and bond yields, which increase the opportunity cost of holding bullion.

About 60 people are believed to have been killed after a bomb hit a school in eastern Ukraine, authorities said, as Russian President Vladimir Putin prepared to lead celebrations on Monday marking the victory of the Soviet Union over Nazi Germany in World War II.

Spot silver slid 0.5% to $22.23 an ounce, platinum fell 1.6% to $948.00 and palladium fell 0.4% to 2,038.58 $.

Demand concerns sent palladium down more than 8% on Friday to its lowest level since January.

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