Gold Prices Suffer as Higher Rates Weigh on Sentiment

Gold prices have continued to be subdued due to higher interest rates weighing on sentiment. The latest data shows that spot gold was down 0.1% at $4,281.98 per ounce as of 0155 GMT, while US gold futures for December delivery remained little changed at $4,317.50.

The Federal Reserve's 25-basis-point rate increase last week, which took its benchmark interest rate to 3.75%-4%, has led market participants to assess the possibility of another hike later this year amid persistent inflation and stronger economic activity.

This higher interest rate environment can reduce the appeal of gold relative to interest-bearing assets, while a stronger US dollar makes dollar-denominated bullion more expensive for buyers holding other currencies. Other precious metals have also been affected, with spot silver falling 0.6% to $64.07 per ounce and palladium declining 0.1% to $1,260.70.