Gold approaches its December low weighed down by the dollar

Gold prices hit a nearly seven-month low on Wednesday as a strengthening dollar and increased bets on rising interest rates dampened the interest-bearing bullion’s appeal.

By 1053 GMT, spot gold was down 0.2% at $1,760.90 an ounce, after losing 2.6% on Tuesday. US gold futures were down 0.3% at $1,759.

The dollar rose to a nearly two-decade high, making bullion, which trades on the greenback, less attractive to foreign buyers.

“With the Federal Reserve expected to hike rates aggressively in upcoming meetings, expect gold to remain under pressure in the short term,” said UBS analyst Giovanni Staunovo, adding that gold could fall as low as $1,700 an ounce by the end of the year.

Bullion has struggled as global rate hikes and US Treasury yields rise, raising the opportunity cost of holding the gold metal.

Investors now await the release of the US central bank meeting minutes on June 14-15 at 1800 GMT and US payroll data on Friday to gauge the health of the economy.

China, the top consumer of gold, witnessed nascent outbreaks of COVID-19 across the country.

In other precious metals, silver was down 0.2% at $19.15 an ounce; platinum fell 0.9% to $857.71; and palladium was up 0.8% at $1,947.82.