Gold prices slip as dollar strengthens towards 20-year high

Gold prices slip as dollar strengthens towards 20-year high

Gold dropped on Monday as an elevated dollar pressured demand for greenback-priced bullion, with rising U.S. Treasury yields further weighing on prices.

Spot gold was down 0.4% at $1,874.89 per ounce, by 0252 GMT, while U.S. gold futures also slipped 0.4% to $1,874.80. The dollar firmed near recent 20-year highs against its rivals, making greenback-priced bullion less attractive for other currency holders.

"A decisive break higher through 104.00 by the dollar index should be enough for gold to retest support at $1,850," and then $1,835, said OANDA senior analyst Jeffrey Halley, adding persistent strength in the greenback this week would cause gold to drift back towards $1,800.

Some unwinding of weekend risk-hedging positioning has also perhaps pressured gold, Halley said.

Benchmark 10-year U.S. Treasury yields hit their highest since November 2018 on Monday, dragging on prices of zero-yield gold.

Two of the U.S. Federal Reserve's most outspoken policy hawks on Friday pushed back on the view that the U.S. central bank missed the boat on the fight against high inflation, citing a tightening of financial conditions that began well before the Fed began raising interest rates in March.

While gold is seen as a safe store of value during times of political and economic crises, it