Gold hits seven-week low as inflation concerns weigh on metals
Rising oil prices, a stronger US dollar and higher Treasury yields were cited by Al Jazeera as pressures on precious metals.
Spot gold fell 3.3 per cent on Monday to $4,146.51 an ounce, its lowest level since 5 August, according to Al Jazeera. US gold futures also dropped 3.3 per cent, to $4,178.40.
Al Jazeera linked the decline to inflation concerns amid rising oil prices, a stronger US dollar and higher Treasury yields. The report said oil prices rose about 3 per cent after US President Donald Trump rejected an Iranian offer to resolve the conflict and reopen the Strait of Hormuz.
Gold is often treated as a hedge against inflation, but it does not pay interest. Al Jazeera quoted investment adviser Sherif Othman saying higher Treasury yields can lead investors towards yield-bearing assets and reduce gold’s appeal.
The report said the Federal Reserve raised its benchmark rate by a quarter of a percentage point earlier this month and signalled at least one further rise was likely in coming months. It also cited policymakers’ concerns that inflation risks remain elevated.
Other precious metals also fell on Monday. Silver dropped 4.7 per cent to $61.27 an ounce, platinum declined 2.9 per cent to $1,726.30 and palladium fell 4.4 per cent to $1,211.45.
