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Gold drops to near one-year low as rate-hike fears loom – Times of India

Gold costs fell on Thursday to their lowest in practically a yr, weighed down by prospects of extra rate of interest hikes by main central banks to sort out hovering inflation.
Although gold is seen as a hedge in opposition to inflation, rising rates of interest have a tendency to elevate bond yields, growing the chance price of holding bullion that pays no curiosity.
Spot gold was down 0.5% at $1,687.29 per ounce, as of 0711 GMT, its lowest since early August 2021.
U.S. gold futures fell 0.6% to $1,687.30 per ounce.
“Clearly inflation expectations are receding because the Fed and other central banks are embarking on aggressive tightening regime, which is undermining gold’s appeal,” stated Ilya Spivak, a forex strategist at DailyFX.
The European Central Bank is ready to elevate rates of interest for the primary time in 11 years on Thursday, with a much bigger-than-flagged transfer seen as more and more doubtless as policymakers concern shedding management of runaway shopper worth progress.
The U.S. Federal Reserve is broadly anticipated to elevate charges by 75 foundation factors at its coverage assembly subsequent week.
British inflation in June surged to a 40-yr peak, bolstering possibilities of a half-share-level charge hike by the Bank of England subsequent month.
“Gold broke below $1,700/oz as investors continue to reduce exposure to the sector ahead of central bank meetings,” ANZ analysts stated in a be aware.
Indicative of sentiment, holdings of SPDR Gold Trust, the world’s largest gold-backed trade-traded fund, fell 0.3% to 1,005.87 tonnes on Wednesday, their lowest since January.
Offering some respite, the U.S. greenback slipped 0.3% in opposition to its rivals. A weaker buck makes gold cheaper for holders of different currencies.
Meanwhile, Russia resumed pumping gasoline via its largest pipeline to Germany on Thursday after a ten-day outage, easing Europe’s provide issues.
Elsewhere, spot silver fell 0.9% to $18.49 per ounce, platinum dipped 0.7% to $852.14, and palladium rose 0.1% to $1,863.47.

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