Singapore, Oct 20 (BNA): Gold prices remained at three-week lows, weighed down by rising US dollar and Treasury yields amid concerns that the Federal Reserve will continue to raise interest rates sharply.
Spot gold was down 0.1% at $1,627.04 an ounce, as of 0049 GMT. Reuters reported that prices earlier recorded their lowest level since September 28 at $ 1624.98.
US gold futures fell 0.1% to $1,632.60.
The dollar index is flat, having gained 0.8% on Wednesday, while 10-year Treasury yields are at their highest since mid-2008.
The Federal Reserve said Wednesday in a report that showed that US economic activity expanded modestly in recent weeks, although it held steady in some areas and declined in others.
With the latest data showing inflation continuing to rise more than triple the central bank’s 2% target, the report may do little to quell expectations for a fourth straight interest rate hike of 75 basis points next month.
While gold is a hedge against inflation, higher interest rates increase the opportunity cost of holding bullion, which produces nothing.
Data on Wednesday showed that consumer inflation in the euro zone fell slightly in September than previously expected, but remained at a record high, confirming market expectations of further interest rate hikes before the end of the year.
Holdings of the SPDR Gold Trust, the world’s largest gold-backed trading fund, fell 6.08 tons on Wednesday, the largest one-day outflow since July.
Spot silver fell 0.4 percent to $ 18.36 an ounce, platinum fell 0.6 percent to $ 878.52, and palladium fell 0.6 percent to $ 1988.78.
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