Gold prices suffered losses for the second week in a row, affected by the rise in the dollar and Treasury bond yields, after the statements of the head of the US Federal Reserve that tends to tighten monetary policy.
Fed officials, including its Chairman Jerome Powell, said on Thursday that they were still not confident that interest rates are high enough to end the battle with inflation.
This has hit the market’s expectations that US interest rates will reach a peak.
After Powell’s comments, US 10-year Treasury yields rose from their lowest levels in more than a month, making the yield-free yellow metal less attractive to investors.
Traders now expect the first possible cut from the US central bank to the interest rate in June next year, instead of the previous forecast of its reduction in May.
High interest also increases the opportunity cost of holding gold.
The dollar index, which measures the performance of the US currency against a basket of six major currencies, settled at 105.86 points, recording a weekly gain of about 0.8 percent.
