Gold hits lowest price since late April on fears of rate hike
Never-ending speculation surrounding higher US interest rates and a firm dollar maintained pressure on gold prices Monday, stretching a two-week decline into a new week on the back of some Fed speakers’ comments.
June Comex gold futures were last down $5 an ounce at $1,247.90, while July Comex silver was last down $0.147 at $16.385 an ounce. Last week, gold futures lost about 1.6%.
The yellow metal has been under pressure since the Fed published last week the minutes of its April meeting, which showed officials believe the US economy could be ready for another interest rate increase next month.
Gold is still up nearly 18% so far this year.
Higher interest rates increase the opportunity cost of holding non-yielding bullion.
San Francisco Federal Reserve president, John Williams, said Monday that he expected the US central bank to hike rates two or three times this year, though he was concerned about the drop in inflation expectations.
His comments came after St. Louis Fed head James Bullard said that a relatively tight labour market in the US might add extra pressure on inflation, raising the case for higher interest rates.
Despite the recent decline, gold is still up nearly 18% so far this year.