Gold prices fall to a three-week low on strengthening dollar

The gold prices They fell to a three-week low on Friday as the dollar strengthened after the US Federal Reserve signaled a willingness to raise interest rates in March, putting bullion on track for its worst week since late November.

At 1033 GMT, spot gold was down 0.4% at $1,789.40 an ounce. US gold futures were down 0.2% at $1,790.70.

Gold prices rose to a high in more than two months earlier in the week, as heightened tensions over Ukraine and increased market volatility fueled interest in bullion as safe-haven assets.

Prices have fallen more than 3% since then, below the 100 and 200-day moving averages in the latest session, after the Fed on Wednesday reaffirmed its plans to end the bond purchases it started to make. in the face of the economic consequences of the pandemic and signaled an increase in interest rates in March.

“Both the bulls and the bears will be equally frustrated by the recent price movements (of gold)”, said Ross Norman, an independent analyst.

“The market seems to be looking at the $1,800 level, which is acting like a giant price magnet. And it seems we’re still hovering around that point”, he said, adding that the strength of the dollar and rising yields were putting pressure on gold.

Rising rates raise the opportunity cost of holding bullion, which is non-interest bearing and priced in dollars.

Among other precious metals, silver fell 1% to $22.52 an ounce and headed for a weekly decline of 7%, platinum lost 2% to $1,001.74 and palladium fell 4. 1% to $2,278.10, although it has gained about 8% so far this week.

With information from Reuters.