BENGALURU: Gold fell more than 1 per cent alongside sliding equities on Monday as investors sought refuge in the dollar, which has been boosted by a run of strong US economic data reinforcing expectations of further interest rate rises.

Spot gold was down 1.1pc at $1,189.37 an ounce at 1220 GMT. US gold futures fell 1.1pc to $1,192.30 an ounce.

“The strong US dollar and expectations of more interest rate hikes are pushing gold down and kind of scaring gold investors,” said Carlo Alberto De Casa, chief analyst at ActivTrades.

“Investors are not sure about buying gold as it is unable to break above $1,210, a strong resistance.”

Gold has fallen more than 12pc from a peak in April largely due to the dollar’s strength, which reflects a vibrant US economy, rising US interest rates and fears of a global trade war.

A stronger dollar makes dollar-denominated gold more expensive for holders of other currencies.

Global equity markets tumbled as investor confidence took a knock from last week’s spike in US Treasury yields and concerns about the US-China trade dispute.

The nervous mood was aggravated as China’s central bank on Sunday cut the level of cash that banks must hold as reserves, in a move aimed at lowering financing costs.

The US unemployment rate fell to near a 49-year low, a government report showed on Friday, the latest in a string of positive data that could prompt the Federal Reserve to maintain a path of gradual interest rate increases.

Spot silver fell by 1.2pc to $14.41 and palladium declined 0.7pc to $1,061.47. Platinum was down 1pc at $812.90 an ounce.

Published in Dawn, October 9th, 2018