Investing.com – Gold prices fell on Monday, weighed by an uptick in the dollar after upbeat comments on inflation from the head of the New York Federal Reserve increased expectations of a rate hike this year.
Gold futures for August delivery on the Comex division of the New York Mercantile Exchange fell by $9.09 or 0.72%, to $1,247.49 a troy ounce.
Gold futures came under pressure on Monday, as Bill Dudley, head of the New York Federal Reserve, downplayed the recent slowdown in inflation, adding that halting rate increases at this point would be dangerous.
"Inflation is a little lower than what we would like, but we think that if the labor market continues to tighten, wages will gradually pick up and with that, inflation will gradually get back to 2 percent," Dudley told a local business group in Plattsburg, New York.
The move lower in gold prices on Monday comes fresh on the heels of a two-week losing streak, as the precious metal has remained under pressure since the Federal Reserve hiked rates last Wednesday, leaving the door open for an additional rate this year.
In a rising interest rate environment, investor appetite for gold weakens as the opportunity cost of holding the precious metal increases relative to other interest-bearing assets such as bonds.
The rise in the dollar to session high against its peers, weighed on commodities across the board.
silver futures lost 0.88% to $16.515, a troy ounce while platinum futures fell by 0.29% to $924.15.
Copper added 0.98% to $2.589, while updated weather forecasting models pointed to weak demand for natural gas, which dipped to $2.901, down 4.48%.