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Gold falls for fourth consecutive week, bets on Fed rates reduce its appeal

Gold fell on Friday and headed for a fourth straight weekly decline, pressured by broad dollar strength on the prospect of an aggressive interest rate hike by the US Federal Reserve.

At 1039 GMT, spot gold was down 0.2% at $1,817.39 per ounce, after hitting $1,810.86, its lowest since February 7. Bullion has lost more than 3% so far this week.

US gold futures fell 0.5% to $1,816.40 an ounce.

The fact that the Federal Reserve is the most belligerent of the major central banks and safe-haven flows into the greenback are weighing on gold, said Fawad Razaqzada, market analyst at City Index.

“Gold has not found any kind of support at times like now, when safe-haven demand is expected to be strong… We have seen many support levels break, which is discouraging for short-term traders. term,” Razaqzada added.

The dollar index was headed for a sixth straight weekly rise, hovering around 20-year highs, as concerns persist that Federal Reserve moves to curb inflationary pressures could dampen global economic growth.

Last week, the Fed raised its benchmark overnight rate by half a percentage point.

“Gold’s current trading level, below $1,830, looks too cheap, though any gains are likely to be capped by a series of rate hikes that will lessen the attractiveness of gold, which is not yielding,” he said. Kinesis Money analyst Rupert Rowling in a note.

Gold’s recent slide has wiped out most of the gains made in a rally fueled by safe-haven demand amid Russia’s invasion of Ukraine, which had pushed prices to near-record levels in mid-March.

Among other precious metals, spot silver was up 0.6% at $20.78 an ounce but has fallen about 7% this week, platinum was up 0.7% at $950.06 and palladium was up 1.5%. % to $1,936.55, though both are on track for weekly losses.

Source: Elcomercio

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