Gold hits over 2-week low on hawkish Fed bets, firmer dollar

div classBodysc17zpet90 cdBBJodivpBy Bharat Gautamp

pReuters – Gold prices dipped on Monday to their lowest in more than two weeks, as bets for an increasingly aggressive and hawkish U.S. Federal Reserve approach to tightening monetary policy boosted the dollar and pressured demand for bullion.pdivdivdiv classBodysc17zpet90 cdBBJodiv

pSpot gold was down 0.3 at 1,923.74 per ounce, as of 0321 GMT, hitting its lowest since April 7. U.S. gold futures were down 0.6 at 1,923.30.p

pAlthough the 10year U.S. Treasury yield is nearing 3 and theoretically thats supposed to be a tipping point for gold, it is more about real yields that are starting to catch up and that will weigh on gold, said Stephen Innes, managing partner at SPI Asset Management. [US] p

pWith expectations for a halfpercentage point interest rate hike at the Feds May meeting now locked in, traders on Friday piled into bets that the U.S. central bank will go even bigger in subsequent months. p

pThe dollar firmed near its highest in two years, making greenbackpriced gold costlier for other currency holders. [USD] p

pGold is highly sensitive to rising U.S. shortterm interest rates and higher yields, which increase the opportunity cost of holding nonyielding bullion. It is, however, seen as a safe store of value during economic and political crises. p

pGold still has some intrinsic value when economies slow because then, banks dont want to raise interest rates, Innes said, adding: “The market is pricing in rates, rates, rates. But what happens if the economy starts tanking very aggressively？”p

pU.S. officials arrived in Kyiv late on Sunday and held talks with President Volodymyr Zelenskiy, an aide to the Ukrainian leader said, as Russias invasion entered a third month.p

pSpot silver dipped 1 to 23.89 per ounce, platinum eased 0.4 to 927.00, and palladium fell 2.9 to 2,305.69.p

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pp Reporting by Bharat Govind Gautam in Bengaluru Editing by Sherry JacobPhillipsp

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