Connect with us

Gold prices decline as dollar increases due to strong Fed rate rise bets



On Thursday, gold fell more than 2% to a level close to a year ago as the dollar continued its strong advance and speculation about a significant interest rate increase by the Federal Reserve increased.
At the expense of gold, the dollar rose to a 20-year high and became the chosen safe haven in recent times due to rising economic uncertainties.
Gold is seen as an inflation hedge, but because bullion pays no interest, its attraction tends to decline when interest rates are high.
Data released on Wednesday indicated a sharp increase in U.S. annual consumer prices, supporting the need for a rate increase to control inflation.
For the second consecutive week, U.S. weekly unemployment claims increased, indicating a possible cooling in the labor market due to tighter monetary and financial conditions.