Gold remained weak below $1,810 an ounce on Tuesday after falling more than 2% in the previous session, as Federal Reserve chairman Jerome Powell’s reappointment pushed the dollar and bond yields higher. The news bolstered expectations for further policy tightening as the outlook for US interest rates grew increasingly hawkish, with at least three Fed officials having openly discussed a faster pace of stimulus tapering.
Gold previously gained as investors hedged inflation risks and sought safe-haven assets amid economic and policy outlook uncertainties. However, higher interest rates raise the non-interest bearing metal’s opportunity cost, reducing its appeal. A stronger dollar also makes it more expensive for buyers with other currencies.
