Gold price falls under pressure from the dollar and the increase in bond yields

Gold prices fell on Monday, reaching their lowest level in three and a half months, as high bond yields and a firm dollar curbed demand for bullion, although riskier assets fell after gloomy Chinese economic data.

A stronger dollar makes gold more expensive for foreign buyers, while rising US Treasury yields raise the opportunity cost of holding non-interest-bearing bullion.

At 1127 GMT, spot gold was down 0.38% at $1,804.99 per ounce, having earlier hit its lowest since January 31 at $1,786.60. US gold futures were down 0.6% at $1,798.

“Spot gold might not stray far from the US$ 1,800, held back by the might of the ‘Dollar King’ and high bond yields, while supported by looming recession prospects,” Said Han Tan of Exinity.

Gold prices have lost more than 13% since hitting a near-record high of $2,069.89 an ounce in March, as the dollar and debt yields were buoyed by aggressive bets on rate hikes. of interest.

“Having fallen through the psychologically important threshold of $1,800 an ounce and with aggressive monetary policy more likely to strengthen than weaken, it is hard to see where gold can now find a short-term foothold.” said Rupert Rowling, market analyst at Kinesis Money, in a note.

The dollar consolidated gains near a two-decade high as stocks, oil prices and riskier currencies were hit by unexpectedly weak economic data from China that highlighted fears of a slowdown.

In other precious metals, spot silver was up 0.2% at $21.11 an ounce, after falling to its lowest level since July 2020 in the latest session. Platinum was down 0.4% at $935.18. , and palladium was up 0.9% at $1,960.58.