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Title: Gold Down as Investors Expect Interest Rate Hikes

Jul 21, 2022 12:20AM ET

By: AnalysisWatch

Gold was down Thursday morning in Asia, falling to its lowest level in nearly a year as investors await interest rate hikes from major central banks to stem rising inflation.

Gold futures fell 0.66% to $1,689.05 at 12:03 AM ET and the dollar, which usually moves inversely to gold prices, edged lower Thursday morning.

The Federal Reserve is widely expected to raise interest rates by 75 basis points at its July 26-27 meeting.

On the other hand, the European Central Bank will raise interest rates on Thursday for the first time since 2011 in an effort to curb runaway inflation.

"Inflation expectations are clearly going down because the Fed and other central banks are tightening aggressively, which undermines the attractiveness of gold," Ilya Spivak, currency strategist at DailyFX, told Reuters.

In Japan, the Bank of Japan left its interest rate unchanged despite forecasting higher consumer inflation amid higher global commodity prices.

"Gold broke below $1,700/oz as investors continue to reduce exposure to the sector ahead of central bank meetings," ANZ analysts said in a note.

Investors are also eyeing the reopening of the Nord Stream pipeline after a 10-day maintenance break.

In other precious metals, silver fell 0.6%, platinum slipped 0.5%, and palladium rose 0.3%.

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