By Ambar Warrick
Investing.com– Gold prices fell slightly on Monday, extending sharp declines from last week as strength in the dollar and growing uncertainty over hawkish U.S. monetary policy weighed on appetite for the yellow metal.
fell 0.2% to $1,710 an ounce, while fell nearly 0.1% to $1,721 an ounce by 22:15 ET (02:15 GMT). Both instruments sank sharply last week on growing concerns that the Federal Reserve will continue to raise interest rates at a fast pace in the near-term.
Bullion prices saw fresh pressure on Monday as the jumped to a new 20-year high, while Treasury yields also advanced. Data on Friday showed that U.S. grew more than expected in August, giving the Fed more space to keep hiking rates sharply.
While U.S. wage growth lagged and unemployment rose, traders are pricing in a of a 75 basis point hike at the Fed’s next meeting, seeing sufficient tightness in the labor market.
Gold prices have fallen significantly from 2022 highs as the Fed began hiking interest rates and pushed up yields.
The Fed is looking to combat inflation reaching 40-year highs on rising food and fuel prices. Several members of the central bank recently indicated that interest rates are likely to keep increasing until inflation is substantially closer to the bank’s 2% target.
The prospect of stronger interest rates has also seen the dollar largely overtake gold as a go-to safe haven. This saw the yellow metal benefit little from a recent escalation in geopolitical tensions between China and Taiwan.
Other precious metals also retreated on Monday. fell 0.1%, while lost 0.6%.
Among industrial metals, copper prices reversed early losses and traded flat after better-than-expected Chinese services sector activity data.
were up 0.1% at $3.3988.
showed that a recovery in China’s services sector persevered through August, indicating that certain facets of the economy remained robust despite a slowdown in manufacturing activity.
China is the world’s largest importer of copper. Slowing economic growth in the country has severely dented copper prices so far this year.
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