As investors evaluated the U.S. Federal Reserve governors’ warning of future interest rate hikes ahead of a consumer inflation index anticipated later this week, gold slipped lower on Monday after eking out a small 0.1% gain the previous week.
By 0400 GMT, spot gold had decreased 0.1% to $1,923.33 per ounce, while U.S. gold futures had decreased 0.1% to $1,942.90.
declining holdings of global gold exchange-traded funds (ETF) demonstrate that investing demand is still weak. He also noted that increasing rates will put pressure on the precious metal.
The largest gold-backed ETF in the world, SPDR Gold Trust, reported that its holdings dropped on Friday to their lowest level since January 2020.
Even after voting to keep the benchmark rate unchanged last week, Fed officials warned on Friday of additional rate increases, with three policymakers stating they are still unsure about whether the fight against inflation is over.
Higher interest rates make it more difficult to buy bullion that doesn’t pay interest and is priced in dollars.
The benchmark 10-year Treasury yields were close to their 16-year peak while the dollar was trading around a more than six-month high.
A survey released on Friday revealed little change in U.S. company activity in September, while a different survey revealed the euro zone economy is expected to fall this quarter and won’t soon resume recovery.
On Friday, the Bank of Japan kept interest rates at historic low levels and promised to sustainably raise inflation to its 2% target.
Investors watch events in Washington, where US lawmakers are wrangling over a spending bill with a Sept. 30 deadline to avoid a potential government shutdown, as well as the arrival of the personal consumption expenditures price index (PCEPI), the Fed’s preferred inflation gauge, on Sept. 29.
Spot prices for platinum dropped 0.3% to $923.28, palladium held steady at $1,249.24, and silver dropped 0.2% to $23.49 per ounce.