Gold extends its decline as the dollar rallied




Gold prices extended their retreat to fall more than 1%  as the dollar hovered near two-decade highs, dimming the metal’s appeal.

Spot gold was down 1.4% at $1,856.26 per ounce by 2:00 p.m. ET. U.S. gold futures settled down 1.3% at $1,858.60.

“The dollar has exploded higher given expectations of a more aggressive U.S. Federal Reserve, in turn weighing on gold, which bears no interest,” said David Meger, director of metals trading at High Ridge Futures.Making bullion more expensive for overseas buyers, the dollar, also considered a safe haven, hovered near a two-decade high. Meanwhile, benchmark 10-year U.S. Treasury yields eased after hitting fresh 3-1/2 year highs earlier in the session.

Two of the Fed’s policy hawks on Friday pushed back on the view the U.S. central bank missed the boat on the fight against stubborn inflation, citing tightening financial conditions that began well before it began raising interest rates in March.

U.S. stocks slide on higher U.S. Treasury yields, with sentiment taking a hit from fears of an economic slowdown in China.

While gold is considered a hedge against inflation and economic uncertainties, rapid U.S. interest rate hikes increase the opportunity cost of holding the non-yielding bullion.

Spot palladium rose 1.6% to $2,079.08 per ounce, after shedding as much as 8% on Friday amid concerns over automobile demand due to Covid curbs in China.

Platinum shed 1.1% to $952.06 and silver fell 2.5% to $21.78.

Simple facts:The term spot price was used as far as the first time in history when trading occurred. Back then all the sophistication of making a deal was not as advanced as it is today. It was more like if you agree on the price lest conclude right not on the spot. And this is where the term spot price took its meaning for traders and today is used to indicate the current market price of a commodity available to be bought/sold for immediate settlement. Therefore, the spot price is what is the value of an asset right at this very moment for immediate delivery.