PRECIOUS-Gold extends fall on stronger dollar, Fed rate-hike worries

BY Reuters | ECONOMIC | 08/15/22 09:17 PM EDT
       Aug 16 (Reuters) - Gold prices inched lower on Tuesday after
falling more than 1% in the previous session, weighed down by an
uptick in the U.S. dollar and worries over further U.S. interest
rate hikes.

    FUNDAMENTALS
    * Spot gold        was down 0.1% at $1,777.46 per ounce, as
of 0054 GMT, after hitting its lowest since Aug. 8 at $1,772.30
on Monday.
    * U.S. gold futures        eased 0.2% to $1,793.90 per
ounce.
    * The dollar        rose 0.1% to a more than one-week high
against its rivals, making gold more expensive for buyers
holding other currencies.
    * U.S. single-family homebuilders' confidence and New York
state factory activity fell in August to their lowest levels
since near the start of the COVID-19 pandemic, a further sign
the economy is softening as the Federal Reserve raises interest
rates.
    * Fed officials have maintained a hawkish tone and hinted at
more rate hikes down the year to tame high inflation.

    * Although gold is seen as a hedge against inflation, rising
 U.S. interest rates dull non-yielding bullion's appeal.
    * Investors now await minutes from the Fed's July meeting on
Wednesday for clues on further rate hikes.
    * Traders were pricing in around a 36.5% chance of a
75-basis-point rate hike by the Fed in September and a 63.5%
chance of a 50 bps increase.
    * SPDR Gold Trust      , the world's largest gold-backed
exchange-traded fund, said its holdings fell 0.2% to 993.94
tonnes on Monday from 995.97 tonnes on Friday.
    * Spot silver        slipped 0.2% to $20.21 per ounce,
platinum        fell 0.4% to $929.29, and palladium        was
steady at $2,144.52.

    DATA/EVENTS (GMT)
    0430  Japan    Tertiary Ind Act NSA      June
    0600  UK       Claimant Count Unem Chng  July
    0600  UK       ILO Unemployment Rate     June
    0600  UK       HMRC Payrolls Change      July
    0630  India    WPI Inflation YY          July
    0900  EU       Total Trade Balance SA    June
    0900  Germany  ZEW Economic Sentiment    Aug
    0900  Germany  ZEW Current Conditions    Aug
    1230  US       Housing Starts Number     July
    1315  US       Industrial Production MM  July

 (Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu
Sahu)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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