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Gold prices fall due to dollar, bond yields rise

Gold prices

Gold prices fell, on Tuesday, affected by the rise of the US dollar and bond yields, after a series of rises for the yellow metal during the last period.

The decline in gold prices came at a time when investors are awaiting the central banks’ reaction to the escalation of inflation pressures, before important upcoming meetings within days.

Spot gold fell 0.1 percent to $1,805.06 an ounce by 06:07 GMT.

US gold futures were unchanged at $1,806.00.

The precious metal jumped nearly one percent on Monday, recording 1809.66 an ounce, a difference of about four dollars from its highest level in nearly a month, which it reached last week.

The dollar rose 0.1 percent today, after it fell to its lowest level in nearly a month in the previous session, which reduced the demand for gold for holders of other currencies.

“Gold will remain relatively well supported in the current inflation climate until the Federal Reserve takes a strong containment action,” said Stephen Innes, managing partner at SBI Asset Management.

He continued, “But if inflation spreads and gets out of control, the Reserve Board may raise prices quickly, and this would reduce demand in the gold market.”

Investors are now looking forward to Thursday’s European and Japanese central bank meetings, followed by the US Federal Reserve meeting next week and the Bank of England policy committee meeting. The US GDP data for the third quarter of the year is also expected.

As for other precious metals, silver fell in spot transactions 0.4 percent to $ 24.46 an ounce.

Platinum fell 0.6 percent to $1,051.11 and palladium settled at $2,050.46, unchanged.

In a related context, last Thursday, Jarome Powell sought to eliminate the trading scandal that has spread in the US central bank in recent weeks, by adopting a series of new restrictions on the investments of senior Federal Reserve officials.

But the Fed watchers said the uproar struck too close to the central bank’s inner circle to avoid a major blow to the institution’s standing. Worse, the turmoil comes just weeks before a major policy shift and with Powell trying to win a second term.

“This was a black mark on the Fed and I’m sure they’ll recover from it, but it doesn’t help Jay,” said David Wessel, director of the Center on Fiscal and Monetary Policy at the Brookings Institution, a Washington think-tank.

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