The dollar, the Fed, trade in brief

Gold prices fell on Monday, as the dollar firmed after indications by the US Federal Reserve last week that it would pursue a tighter monetary policy.

The Fed raised US interest rates last week and announced that it expects four further increases by the end of 2019 and another by 2020, in a context of sustained economic growth and a market for solid work.

Higher interest rates in the United States tend to boost the dollar and push bond yields, which puts pressure on the price of gold by increasing the opportunity cost of the holding of non-productive ingots.

Spot gold was down 0.3% to $ 1,188.41 at 0407 GMT. Friday, gold hit its lowest level since August 17 at 1 180.34 dollars an ounce.

US gold futures declined 0.3% to $ 1,192.30 an ounce.

"Gold prices remain dependent on the dollar's price at this stage.The US economy has been rosy and better than expected.Trump administration efforts to reduce the trade deficit of the US dollar. an economic point of view were also supportive of the greenback, "Barnabas Gan, an analyst at OCBC, said.

Gold prices should experience less volatility as Chinese markets are closed for a week, on the occasion of the Golden Week celebration, said Gan.

The dollar index was up 0.1% from a basket of major currencies and was near a peak of nearly three weeks in the previous session.

Gold has fallen about 13% from its peak in April, mainly due to the stronger dollar, which has been boosted by a vibrant US economy and fears of a strong US dollar. a global trade war. Investors bought the greenback instead of gold as a safe investment.

Meanwhile, the United States and Canada reached an agreement on Sunday to save NAFTA as a trilateral pact with Mexico. talks said.

"Gold has been a sellers' market for some time, but with the dollar level of 1,190, we are now firmly in the bearish zone of gold and with the dollar likely to strengthen with speculators likely to target the trough of August while the yellow metal reached $ 1,160 before bouncing back, "said Stephen Innes, head of trading at APAC at OANDA in Singapore.

Gold speculators increased their net net position from 2,923 lots to 77,313 lots, the largest in three weeks in the week to September 25, according to CFTC data.

Among other precious metals, palladium dropped 0.7% to $ 1,065.41, after hitting a new eight – month high at $ 1,094.60 an ounce at the previous session.

Silver was down 0.3% at $ 14.55 an ounce, while platinum dropped 0.4% to $ 808.60 an ounce.