Gold prices fell to their lowest level since March 2021 after US Treasury yields rose, the dollar rose and bets that the US central bank would raise interest rates by a large percentage eased.
And spot gold prices fell 1.2% to $1,674.99 an ounce, while US gold futures fell 1.1% to $1,690.90.
Gold’s losses briefly eased after investors estimated US retail sales rose unexpectedly in August, while US weekly jobless claims fell 5,000 to a seasonally adjusted 213,000 over the past week.
Markets are expected to absorb an interest rate hike of at least 75 basis points at the close of the US Federal Reserve meeting next week, with analysts expecting the hike to reach 100 basis points.
Gold is considered a hedge against inflation, but it is not profitable, so the price of gold is affected by interest rates and Treasury bond yields.
The head of the International Monetary Fund, Kristalina Georgieva, said that central banks should work to fight inflation on a large scale.
“The strong dollar index this week, along with rising US Treasury yields and some US inflation data, has left buyers of gold and silver largely on the sidelines,” said financial analyst Jim Wyckoff.