Gold prices tumble to nearly a seven-week low

Courtney Goldsmith
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Prices of the safe-haven asset have tumbled (Source: Getty)

Gold plunged to near a seven-week low today as a strengthened US dollar and higher bond yields pushed up the cost of holding the non-yielding asset.

The yellow metal fell 1.67 per cent, or $20.80, to $1,221.50 an ounce in afternoon trading.

The fresh loss came after gold booked its first monthly decline of the year for June at Friday's close.

"Gold keeps giving up ground and the strength of the US dollar is adding to its woes," said David Madden, market analyst at CMC Markets.

"The metal has been pushing lower for nearly one month now, and today it dropped through the 200-day moving average at $1235. Gold is now trading at its lowest level since mid-May. The bounce back in global equity markets means traders have adopted a more risk on strategy, and that means weakened demand for gold."

Read more: Gold: Should you buy or sell?

"The US dollar started the week on a positive note," said Ipek Ozkardeskaya, senior market analyst at London Capital Group.

"Yet, it is noteworthy to remind that the USD appetite could remain short-lived, if the Fed meeting minutes jog the Fed-hawks memory on Wednesday and remind them how disappointed they were following the Fed's June meeting."

Read more: Signs of a cooler US economy as Fed eyes normalisation

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