PRECIOUS-Gold drops 1.5% as dollar gains, rate-hike fears loom

BY Reuters | ECONOMIC | 08/15/22 05:34 AM EDT

* Gold hits one-week low, other precious metals also decline

* Focus on Fed minutes due on Wednesday

* U.K. inflation numbers for July due later this week

* China's physical gold demand a concern amid slowdown - analyst (Recasts, adds comments and graphic; updates prices)

By Arundhati Sarkar

Aug 15 (Reuters) - Gold dropped about 1.5% on Monday as a stronger dollar and recent hawkish comments from U.S. Federal Reserve officials eroded bullion's appeal, while another failed attempt to remain above the key psychological level of $1,800 put further pressure.

Spot gold slid to $1,773.85 per ounce by 1143 GMT, having hit its lowest since Aug. 8. U.S. gold futures dropped 1.5% to $1,789.00.

"The recovery in dollar is a big reason behind the fall in gold prices today. The metal has repeatedly run into resistance at $1,800 and is now being pushed back," said Craig Erlam, senior market analyst at OANDA.

"While that does not necessarily mean it has peaked and all downhill from here, the initial profit-taking could see it correct a little."

The U.S. dollar rose 0.6% after a new batch of disappointing Chinese data increased global recession worries.

Gold is also struggling to shine amid concerns over China's physical demand for the precious metal in the face of slowing economic growth, said Lukman Otunuga, senior market analyst at FXTM. The country is the world's biggest gold consumer.

Investors remained cautious as they awaited minutes of the Fed's July meeting to be released on Aug. 17.

Depending on how markets react to the latest Fed minutes, a decline towards $1,770 could open the doors to $1,740, FXTM's Otunuga added. Rising U.S. interest rates dim non-yielding bullion's appeal.

UK inflation numbers for July, due this week, are also on investors' radar.

However, Rupert Rowling, a market analyst at Kinesis Money said what happens in the U.S. is by far the biggest driver for gold and actions of the Fed far outweigh the Bank of England when it comes to impact on prices.

Elsewhere, spot silver fell 2.7% to $20.24 per ounce, platinum dropped over 3% to $932.96, and palladium slipped 2.1% to $2,174.76.

(Reporting by Arundhati Sarkar in Bengaluru, additional reporting by Ashitha Shivaprasad; editing by Uttaresh.V and Krishna Chandra Eluri)

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