Gold slipped to around $1,750 an ounce on Monday as the dollar recovered slightly on haven demand, as widespread protests against strict Covid restrictions in China roiled financial markets. Investors are also bracing for a slew of US economic reports to gauge the state of the world’s largest economy, as well as speeches by several Federal Reserve officials. Last week, the metal got a boost after the latest Fed meeting minutes showed that a substantial majority of US policymakers agreed it would soon be appropriate to slow the pace of interest rate hikes.
Earlier this month, the Fed delivered its fourth straight 75 basis point rate increase and pushed borrowing costs to the highest since 2008 to tame stubbornly high inflation, and markets are now betting that it would moderate the size of its rate hike in December to 50 basis points. Gold is highly sensitive to the rates outlook as higher interest rates raise the opportunity cost of holding non-yielding bullion, denting its appeal.