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Losses of 0.8% sent gold to a one-month low

The price of gold fell to an almost one-month low, amid a general sell-off in the metals against the backdrop of the dollar’s renewed surge and heightened concerns about another giant interest rate hike by the Fed.

Specifically, the December gold contract ended the day trading having lost $14.50, or 0.8%, at $1,748.4 an ounce.

The greenback hit a fresh five-week high against a basket of major currencies, making US-denominated gold more expensive for foreign buyers, leading to a sell-off in the precious metal.

Gold is under pressure more broadly from the dollar’s recent rally, but also from renewed market concerns that Fed Chairman Jay Powell will bolster the case for the US central bank’s hawkish stance in his speech at the Jackson Hole conference later this week , notes Daniel Ghali, commodities analyst at TD Securities.

According to him, gold prices may lose as much as $1,700 after Jackson Hole.

The Fed is expected to raise interest rates by 50 basis points in September, amid expectations that US inflation has peaked and growing fears of a recession, according to economists polled by Reuters.

In the short term, gold could face pressure again as the Fed may raise interest rates further by the end of the year, but once the cycle is over gold will start to rise, Commerzbank said in a note.

Against this backdrop, metals were broadly bearish today, with silver down nearly 1% to $18,883 an ounce.

At the same time, platinum lost 2.3% to $867.1, palladium plunged more than 6.7% to $1,982, while copper lost about 0.5% to $3,647. pound.

Source: Capital

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