Aug 15 (Reuters) – Gold prices slipped on Monday as the dollar rebounded, with expectations of sharp interest rate hikes from the Federal Reserve further pressuring the yellow metal.
Spot gold was down 0.6% at USD 1,791.33 per ounce, as of 0704 GMT, after rising about 1.6% last week. US gold futures fell 0.5% to USD 1,807.30.
The dollar erased earlier losses to strengthen 0.2% against its rivals, making gold more expensive for buyers holding other currencies.
“Gold looks like in some consolidation here for a week or two before resuming the upward march towards USD 2,000 yet again. There may be even some who will feel the need to take profits to offset property portfolio weakness,” said Clifford Bennett, chief economist at ACY Securities.
“Gold is likely to be supported around USD 1,785. A slip to USD 1,760 cannot be ruled out, but this would represent a fantastic long-term buying opportunity.”
Meanwhile, Richmond Fed Bank President Thomas Barkin said on Friday he wanted to raise interest rates further to bring inflation under control.
Investors will be watching out for minutes from the Fed’s last monetary policy meeting due on Wednesday for more clues on future rate hikes.
Traders were pricing in around a 44.5% chance of a 75-basis-point rate hike by the Fed in September and a 57.5% chance of a 50 bps increase.
Although gold is seen as a hedge against inflation, rising US interest rates dim non-yielding bullion’s appeal.
“Gold recorded its fourth consecutive weekly gain amid easing inflationary pressures. However, those same issues may ultimately be a negative,” ANZ analysts said in a note.
On the technical front, spot gold is biased to retest a support USD 1,784 per ounce, a break below which may cause a fall into a range of USD 1,767-USD 1,773, according to Reuters technical analyst Wang Tao.
Elsewhere, spot silver dropped 1.2% to USD 20.57 per ounce, platinum fell 1.3% to USD 950.37 and palladium was steady at USD 2,222.23.
(Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu Sahu and Vinay Dwivedi)
This article originally appeared on reuters.com