Gold faces pressure from interest rate hike expectations

Gold prices rose slightly today, supported by a slight decline in the US dollar and US Treasury yields, but the outlook for the yellow metal prices remained fragile in the face of the prospects of interest rate hikes from major central banks.

By 05:54 GMT, spot gold rose 0.2 percent to $1,854.83 an ounce, and US gold futures rose 0.4 percent to $1,857.60.

But gold is still trading below one-month highs hit last week, if prices fell by about 1 percent on Friday after US data showed employers hired more workers than expected in May.

The US central bank is on its way to raise interest rates by half a point in two monetary policy meetings in June and July, and the US jobs report issued on Friday raised that possibility.

Higher interest rates raise the opportunity cost of holding gold, which does not yield a return, while the yellow metal is considered a safe haven in the face of inflation.

As for other precious metals, silver increased 1.4 percent to $22.22 an ounce, and palladium was traded at $2,028.81 an ounce.

And platinum prices recorded about 1019.75 dollars an ounce, after it reached its highest level since late March on Friday, recording 1032.50 dollars an ounce.

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