September 19, 2022 12:02 AM ET
By: AnalysisWatch
Gold prices retreated Monday, pressured by a stronger dollar, as investors expect aggressive rate hikes from major central banks this week, particularly the U.S. Federal Reserve, to tame high inflation.
At 02:23 AM ET, spot gold was down 0.6 percent at $1,665.08 per ounce. Gold futures in the United States were down 0.6 percent at $1,673.30.
Trading is expected to be light as the London bullion market, the world's largest trading center for physical gold, is closed for Queen Elizabeth's funeral.
The dollar index gained 0.2 percent, making bullion more expensive for foreign buyers.
The U.S. Fed's Federal Open Market Committee is expected to begin its two-day interest rate meeting on Sept. 20 and announce its decision the following day. Markets are expecting the U.S. central bank to raise rates by 75 basis points.
Most banks meeting this week-from Switzerland to South Africa-are expected to raise rates, with markets divided on whether the Bank of England will raise rates by 50 or 75 basis points.
Short-term consumer inflation expectations in the United States fell to a one-year low in September, easing concerns that the Federal Reserve will raise interest rates by a full percentage point.
Gold is considered a safe investment in an inflationary environment, but high interest rates increase the opportunity cost of holding non-performing bullion.
In a note, ANZ said that increasing geopolitical and economic risks provide little incentive to buy safe-haven assets, with the U.S. dollar remaining the asset of choice.
Spot silver fell 1.2 percent to $19.32 per ounce.