Gold fell below $1,800 on Friday en route
to a third straight weekly dip as a stronger dollar and
prospects of higher interest rates eroded its safe-haven appeal,
with an import tax hike by India also seen dampening demand for
Spot gold fell 0.6% to $1,795.89 per ounce by 0925
GMT, after touching its lowest since May 16 at $1,791.30.
US gold futures dipped 0.7% to $1,795.10.
Coming off their worst quarter since early 2021 amidst
aggressive monetary policy from top central banks, non-interest
bearing gold has lost about 1.7% so far this week, with a
stronger dollar heaping further pressure.
The ECB is also likely to start raising rates this month.
“Despite the current risk off mood and with financial
markets a ‘sea of red’, the go-to safe haven just now is the
US dollar,” rather than precious metals, independent analyst
Ross Norman said.
Norman said “the very significant increase in import duties
in India” had also hurt prices.
India, the world’s second biggest bullion consumer, raised
its basic import duty on gold to 12.5% from 7.5% in a bid to
bring down the trade deficit.
Gold’s retreat came despite data showing euro zone
manufacturing production fell last month for the first time
since the initial wave of the COVID-19 pandemic two years ago.
Spot silver fell 2.1% to $19.82 per ounce, and has
dropped about 6.3% this week.
Silver was suffering because of its greater industrial
exposure with investors fearing a global recession was looming,
Rupert Rowling, market analyst at Kinesis Money said, adding
that silver “seems unable to find any footholds.”
Platinum slipped 1% to $885.31, and faces a fourth
consecutive weekly fall. Palladium dropped 1.1% to
$1,915.04, but has gained about 1.5% this week.
(Reporting by Arundhati Sarkar in Bengaluru; Editing by Edmund