Gold dips to one-month low as dollar rises

The precious metal has fallen more than 11% from its April peak

Gold prices fell to their lowest in one month as the dollar strengthened amid expectations that the US Federal Reserve is on track to tighten borrowing costs.

Spot gold fell 0.3 per cent to $1,205.86 per ounce at 0746 GMT, having touched a onemonth low of $1,205 (Dh4.426) earlier in the session. “The dollar is gaining strength after last week’s Fed meeting and positive US economic data, which is weighing on non-yielding assets like gold,” said Hareesh V, head of commodity research at Geojit Financial Services.

The dollar index, which measures the greenback against a basket of six major currencies, was up 0.5 per cent.

The Fed has reaffirmed its plan to raise interest rates in December, followed by two more potential rate hikes by mid-2019 on the back of an upbeat economy and rising wage pressures.

The outlook for tighter credit was supported by an unexpectedly big rise in US producer prices in October, at the fastest pace in six years.

“It seems like the bears are back in control ... It’s disappointing that every time gold starts to rally it runs out of steam so fast,” a Hong Kong-based trader said.

The precious metal has fallen more than 11 per cent from its April peak after investors preferred the dollar as the US-China trade war unfolded.