Gold holds near 4-week low on elevated dollar

GOLD prices hovered near a 4-week low on Tuesday (Jun 14), as a strong dollar countered safe-haven demand fuelled by economic slowdown fears amid prospects of aggressive monetary policy tightening.

Spot gold was up 0.3 per cent at US$1,823.69 per ounce, as of 12.57 am GMT, after falling to its lowest since May 19 at US$1,810.90 earlier in the session. US gold futures fell 0.4 per cent to US$1,825.20.

Gold and palladium suffered sharp declines on Monday, as the dollar rallied on bets for steep US Federal Reserve interest rate hikes, eroding the appeal of bullion and other precious metals.

The dollar still seemed to be the safe haven of choice, steadying near a 2-decade high scaled on Monday, and drawing most investors away from greenback-priced gold.

Asian shares tumbled after Wall Street officially entered bear market territory and bond yields hit a 2-decade high on fears aggressive US interest rate hikes would push the world's largest economy into recession.

Higher short-term US interest rates and bond yields increase the opportunity cost of holding bullion, which yields no interest.

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Gold scales over 1-month peak on mounting economic worries

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Late on Monday, expectations for a 75 basis point hike at the Fed's June meeting jumped to 96 per cent from 30 per cent earlier in the day, according to CME's Fedwatch Tool. A 75-bp hike would be the biggest since 1994.

Spot silver dipped 0.9 per cent to US$21.68 per ounce, platinum fell 0.6 per cent to US$967.67, and palladium dropped 1.3 per cent to US$1,909.49. REUTERS