Gold, other metals retreat as dollar soars

Gold, other metals retreat as dollar soars

Gold fell on Thursday, dragging other precious metals along, as the dollar scaled a fresh two-decade on renewed expectations the Federal Reserve would stick to its aggressive rate-hike roadmap.

Spot gold fell 0.3% to $1,846.56 per ounce by 1244 GMT. U.S. gold futures were down 0.5% at $1,844.30.

"Gold again has failed to garner momentum to the upside, despite pretty epic issues in the global economy, like multi-decade high inflation... What seems to be weighing on gold though in particular is the dollar," independent analyst Ross Norman said.

"It appears that while looking at the ETF (Exchange Traded Fund) flows, the U.S. institutional investors are scaling back positions on gold." The U.S. dollar index rose to two-decade highs -- making gold less attractive for overseas buyers -- benefiting from safe-haven inflows driven by concerns tighter monetary policies to tame surging inflation will hurt the global economy. Gold is highly sensitive to rising U.S. interest rates and higher yields, which increase the opportunity cost of holding non-yielding bullion and also boosts the dollar. Any strength in gold resulting from its role as safe haven and inflation hedge is likely to "remain capped by the rampant US dollar," ActivTrades senior analyst Ricardo Evangelista wrote in