Gold is at a 9-month low

With fresh losses taking its price to a nine-month low, gold moved today as further strengthening of the dollar and bets on aggressive Fed rate hikes curbed investor interest in the precious metal.

Specifically, the August gold contract ended trading at $1,731 an ounce, down 0.6% or $10.6.

In the same sentiment, silver also saw its own September contract slip 0.5%, or 10 cents, to settle at $19.132 an ounce.

Despite ever-increasing recession fears, investors have been choosing the dollar over gold of late, pushing the US currency to near two-decade highs, which in turn further curbs interest in gold among holders of other currencies.

In the same context, the Fed’s continued rate hikes are turning investors towards assets with a steady return of capital, which gold does not offer.

“Gold is under pressure as the dollar rallies big and there are expectations of a fairly big rate hike after the (recent) report highlighted a strong US labor market,” noted Edward Moya, senior analyst at OANDA.

According to him, “gold prices could temporarily retreat below the $1,700 level and then receive strong support around $1,670.”

Despite the evidence that works competitively and pressures the price of gold, however, pessimism about the state of the economies of Asia and geopolitical instability limit the losses of the precious metal.

Elsewhere, metals were broadly down today, with platinum down 2.5% or $22 to $860.7 an ounce, palladium losing 0.7% to $2,171 an ounce. ounce, while copper continued its recent downward trend, with further losses of 2.6% to $3.43 a pound.