Gold hits 3-week low on firm dollar, rate hike concernswritten by Bella Palmer
Spot gold was down 0.2% at $1,754.44 per ounce after falling to its lowest since July 29 at $1,752.77 earlier in the session
Gold prices slipped to a three-week low on Friday and were set for their first weekly drop in five, as a stronger dollar and prospects of more rate hikes by the U.S. Federal Reserve dented bullion's appeal.
Spot gold was down 0.2% at $1,754.44 per ounce, as of 0156 GMT, after falling to its lowest since July 29 at $1,752.77 earlier in the session. For the week so far, the metal is down 2.6%.
U.S. gold futures eased 0.2% to $1,767.70.
Markets are expecting interest rates to go further up and of course the strong dollar is definitely weighing on gold prices at the moment, said Brian Lan, managing director at dealer GoldSilver Central.
Many are staying on the sidelines expecting gold prices to go further down. Also, we've seen quite a bit of liquidation on the ETF (exchange-traded fund) side, he said.
The dollar surged to a one-month high against its rivals, making gold more expensive for buyers holding other currencies.
The Fed needs to keep raising borrowing costs to bring high inflation under control, a string of U.S. central bank officials said on Thursday, even as they debated how fast and how high to lift them.
St. Louis Fed President James Bullard said he was currently leaning toward supporting a third straight 75-basis-point rate hike in September.
Gold is highly sensitive to rising U.S. interest rates, as these increase the opportunity cost of holding non-yielding bullion.
In the July meeting minutes released on Wednesday, Fed officials said the pace of future rate hikes would depend on incoming economic data.
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