Gold extended its decline for a sixth straight session on Monday to hit a near seven-month trough, as a robust dollar and prospects of higher U.S. interest rates took the shine off bullion.
Spot gold was down 0.9% by 1:52 p.m. EDT (1752 GMT) at $1,831.70 per ounce, its lowest level since early March. U.S. gold futures settled 1% lower at $1,847.20.
“There is a reckoning that interest rates are going to be higher for much longer, which has been the bearish element in the precious market. Gold prices could go below $1,800 in the near term,” said Jim Wyckoff, senior analyst at Kitco Metals.
“Trends in the currency markets tend to be stronger and longer-lasting. The appreciation of the U.S. dollar may not end anytime soon, pressuring the gold market.”
The U.S. dollar (.DXY) rose 0.6%, making bullion less attractive to other currency holders.
Traders are pricing in a 55% chance that the Federal Reserve will leave interest rates at the current range of 5.25%-5.50% this year, according to CME’s FedWatch tool.
Since powering above the key $2,000-per-ounce level in early May, gold prices have fallen more than 11%, or $230, pressured by a sharp rise in benchmark U.S. Treasury yields, which makes the non-yielding gold less attractive.