Gold prices fall on Monday

Gold prices fell on Monday as a stronger US dollar and rising Treasury yields pressured bullion, while surging oil prices fuelled inflation concerns and reduced expectations of near term interest rate cuts.

Spot gold dropped 1.4 per cent to $5,097.70 per ounce by 0750 GMT after earlier falling more than 2 per cent, while US gold futures for April delivery declined 1 per cent to $5,106. The dollar climbed to a more than three-month high, making gold more expensive for holders of other currencies, as the US 10 year Treasury yield rose to a one month high, increasing the cost of holding non-yielding bullion.

Investors now expect the US Federal Reserve to hold interest rates steady at the end of its two-day meeting on March 18, according to CME Group’s FedWatch tool, with the probability of rates remaining unchanged in June rising to more than 51 per cent from below 43 per cent last week.

Elsewhere, spot silver fell 1.3 per cent to $84.42 per ounce after earlier dropping more than 5 per cent, while platinum declined 1.3 per cent to $2,108.05 and palladium slipped 2.4 per cent to $1,586.75.