Gold continues to fall on dollar strength

Gold prices fell on Monday, as the US dollar rose against most of its rivals, due to growing chances of the near tightening of the US monetary policy following upbeat economic data and bullish statements by several Federal Reserve officials.

Gold prices fell 0.3% to $1,783.81 an ounce, after opening at $1,788.40, and hit a high of $1,793.68.

Gold closed lower by 0.3% on Friday, the fourth loss in 5 days, as investors focused on buying the US dollar.

Gold prices lost 2.1% last week, the first loss in 5 weeks, due to a rise in the US 10-year Treasury bond yields.

The dollar index rose 0.3% on Friday for another session, marking three-week highs at 92.88 against a basket of major rivals.

The gains come on the back of upbeat inflation data in the US, which might pave the way for a reduction in the bonds purchases program sooner than expected.

Data showed on Friday that US producer prices index rose more than expected in August, as the index is considered a key gauge of the the US inflation rate, which reflects the continued inflationary pressures on the Federal Reserve.

This increased the chances of the Fed to start reducing the bonds purchases program sooner than expected.

Loretta Meester, President of the Federal Reserve Bank of Cleveland said on Friday that she still wanted the US central bank to start reducing asset purchases this year.

Philadelphia Federal Reserve President Patrick Harker said Monday that US bond investors seem to believe that the recent economic slowdown will not be enough to delay tapering the bond-buying program gradually.

Gold stocks at the SPDR ETF remained unchanged on Friday, with the total at the lowest level since April 9, 2020 at 998.17 metric tonnes.