 "gold")
By Ashitha Shivaprasad
(Reuters) - Gold and other precious metals dropped on Thursday, with palladium shedding more than 8%, as investors flocked to the dollar driven by bets the U.S. Federal Reserve will stick to aggressive rate hikes.
Spot gold fell 0.7% to $1,839.01 per ounce by 10:29 a.m. EDT (1429 GMT). U.S. gold futures were down 0.7% at $1,841.60.
"Dollar is rallying as things potentially look negative in the U.S., which is hurting gold. Also, the market is realising the likelihood of seeing pretty aggressive interest rate increases," said Bart Melek, head of commodity strategies at TD Securities.
Rival safe-haven dollar climbed to fresh 20-year highs -- making gold less appealing for other currency holders -- driven by concerns tighter monetary policies to tame surging inflation will hurt the global economy. [USD/]
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Although it is considered a hedge against inflation and a safe bet during economic and political turmoil, gold is highly sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding bullion.
"However, gold is holding relatively better when compared to the industrial precious metals," the demand for which could be hurt in a recession environment, Melek added.
Declines in gold were, however, capped by a slide in the benchmark 10-year Treasury yields, which hit the lowest level in two weeks. [US/]
Spot silver fell 2.1% to $21.11 per ounce - it hit its lowest since July 2020 earlier in the session.
"Silver is falling faster than gold, that's a bearish sign for the whole complex. With the ongoing lockdowns in China, industrial metals are struggling and US institutional investor who's bailing out a gold ETF by extension bails out of silver as well," independent analyst Ross Norman said.
Palladium slid 5.4% to $1,926.13, having earlier slid as much as 8.2% to its lowest since January at 1,867.68.
Platinum dropped 4% to $952.86.
(Reporting by Ashitha Shivaprasad and Eileen Soreng in Bengaluru; Editing by Krishna Chandra Eluri)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
