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Gold prices fell, on Wednesday, as pressure from strong monetary policy concerns and rising bond yields outweighed the relief from the dollar’s decline.

This comes with the anticipation of central banks’ moves to counter inflation, which has hit record levels in many major economies.


Gold Prices Today

The price of gold futures contracts -December delivery- decreased by 0.11%, to record the level of 1709.10 dollars an ounce.

Yesterday, Tuesday, gold prices ended up trading for the second consecutive session.

The price of silver futures contracts – September delivery – increased by 0.31%, at $ 18.81 an ounce, according to data seen by the specialized energy platform.

The spot platinum price declined about 0.81%, to record $866.17 an ounce, in contrast, the spot palladium price declined o.53%, at $1858.99 an ounce.


Dollar Prices

The dollar fell for the fourth consecutive session, although it remained at elevated levels, making bullion priced in the US currency less expensive for buyers holding other currencies.

“Gold appears to be the odd one out, not participating in any broader relief wave despite the dollar’s decline,” said Stephen Innes, managing partner at SBI Asset Management.

He added that central bank hikes in interest rates clearly tarnished the attractiveness of bullion.


Interest Rates

Two well-informed sources said that European Central Bank policy makers are considering raising interest rates by 50 basis points more than expected at their meeting tomorrow Thursday; to tame inflation.

“Because the dollar reacts to a rate hike more sharply by the European Central Bank, gold doesn’t usually bounce back through dollar weakness,” Innes says.

Although gold is seen as a hedge against inflation, higher interest rates and bond yields increase the opportunity cost of holding bullion, which does not result in any interest.

US 10-year Treasury yields stabilized, after two sessions of gains.


Gold Market Forecast

Technical analyst Wan Tao sees spot gold could retest resistance at $1,721 an ounce, and a break above there could see gains for the $1,728-$1,739 range, for his part.

Meanwhile, Asian stocks extended their global rally, as strong US corporate earnings and the expected resumption of Russian gas supplies to Europe helped lift sentiment and ease fears of a recession.

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