PRECIOUS-Gold pinned near 2-1/2-year low as stronger dollar, yields weigh

BY Reuters | TREASURY | 09/26/22 06:37 AM EDT

      Silver hits lowest level since Sept. 8

      U.S. 10-Treasury yields hover near 11-year highs

      Dollar scales fresh two-decade peak

 (Recasts, adds comments, details and updates prices)
    By Brijesh Patel
       Sept 26 (Reuters) - Gold prices were at their lowest
level in 2-1/2 years on Monday, weighed down by a strong dollar
and U.S. Treasury yields amid the U.S. Federal Reserve's hawkish
stance on rate hikes.
    Spot gold        was flat at $1,643.80 per ounce as of 0939
GMT, after dropping as much as 1% earlier to its lowest since
April 2020, at $1,626.41, in the Asia session.
    "We've got dollar strength and an increase in the U.S.
Treasury yields, which typically would push gold lower. However,
broadly speaking, gold isn't doing too badly in the scheme of
things," independent analyst Ross Norman said.
    The dollar index        rose to a fresh high since 2002
against its rivals, boosted by a plunge in British sterling,
making gold more expensive for other currency holders.
    Gold prices have fallen more than $400, or over 20%, since
scaling above the key $2,000 per ounce level in March as major
central banks raised interest rates sharply to tame soaring
    Last week, the U.S. central bank hiked interest rates by 75
basis points and signalled more increases are to come.

    Higher U.S. interest rates dull the zero-yielding bullion's
appeal, while bolstering the dollar and bond yields.
    Benchmark U.S. Treasury yields firmed near their highest
level since 2011, increasing the opportunity cost of holding
non-interest bearing gold.
    "Last week's series of interest rate hikes by central banks
had put gold under heavy near-term pressure and with no prospect
of the banks changing course in the coming months, the
medium-term outlook also looks gloomy for the precious metal,"
Kinesis Money analyst Rupert Rowling said in a note.
    Spot silver        fell 1% to $18.64 per ounce, after
touching its lowest in more than two weeks earlier in the
    Platinum        rose 0.2% to $855.92 and palladium
gained 0.6% to $2,080.22.
 (Reporting by Brijesh Patel in Bengaluru)

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