Gold extends fall as strong dollar, higher US interest rates take toll

Gold extended its decline for the sixth straight session on Monday to hit a near seven-month trough, as a robust dollar and prospects of higher U.S. interest rates took the shine off bullion.

Spot gold was down 0.8% by 9:54 a.m. EDT (1354 GMT) at $1,835.40 per ounce, its lowest since March 10. U.S. gold futures slipped 0.7% to $1,853.00.

"There is a reckoning that interest rates are going to be higher for much longer, which has been the bearish element in the precious market. Gold prices could go below $1,800 in the near-term," said Jim Wyckoff, senior analyst at Kitco Metals.

"Trends in the currency markets tend to be stronger and longer lasting. The appreciation of the U.S. dollar may not end anytime soon, pressuring the gold market."

The U.S. dollar rose 0.4%, making bullion less attractive to other currency holders.

Traders are pricing in a 55% chance that the Federal Reserve will leave interest rates at the current range of 5.25%-5.50% this year, according to CME's FedWatch tool.

Since powering above the key $2,000-per-ounce level in early May, gold prices have fallen more than 11%, or $230, pressured by a sharp rise in benchmark U.S. Treasury yields, which makes the non-yielding gold less attractive.

The market focus now shifts to Fed Chair Jerome Powell's speech later in the day as well as on job openings data, private hiring numbers and U.S. non-farm payrolls over the course of the week.

Spot silver slid 3.4% to a more-than-six-month low of $21.40 per ounce.

"Strength in solar PV installations and rising EV penetration globally should underpin healthy growth in silver's industrial demand for 2023-25 and remain a tailwind for prices," Citi analysts wrote in a note.

Platinum fell 1.3% to $893.12 and palladium dipped 2.8% to $1,210.54.