gold
Gold Image Credit: Pexels

Gold hovers near two-year low as rate-hike fears persist

Gold prices hovered near a two-year low on Friday and were set for a weekly fall as an elevated dollar and prospects of aggressive U.S. rate hikes dented bullion's appeal.

Spot gold down 3% for the week

Spot gold was unchanged at $1,664.48 per ounce, as of 0030 GMT, and was down 3% for the week so far. Prices hit its lowest since April 2020 at $1,659.47 on Thursday.

Get the latest gold|forex rates here.

US gold futures were down 0.3% at $1,673.10. The dollar index was headed for a weekly gain. A stronger greenback makes gold expensive for overseas buyers.

Gold is considered an inflation hedge but rising interest rates increase the opportunity cost of holding the non-yielding asset.

US retail sales unexpectedly rebounded in August, but demand is cooling as the Federal Reserve aggressively raises interest rates to fight inflation. Separate data showed US weekly jobless claims fell last week.

India has slashed the base import prices of gold, palm oil, and crude soya oil, the government said in a statement late on Thursday.

Meanwhile, holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, rose 0.15% to 962.01 tonnes on Thursday from 960.56 tonnes on Wednesday.

Spot silver dipped 0.7% to $19.01 per ounce./sPlatinum fell 0.5% to $900.36 and palladium was down 0.2% at $2,132.49.