Gold gives up $1,800 to six-week trough, why?

Gold prices declined in European trade for the fifth straight session, piercing through $1,800 and hitting six-week lows. 

Gold is heading for the largest quarterly loss since early 2021 as global central banks move to hike rates and control inflation. 

Prices Today

Gold prices fell on Friday by 0.85% to $1,792, the lowest since May 16, after losing 0.6% yesterday, the fourth loss in a row. 

Gold lost 1.6% in June, the third monthly loss in a row as investors buy up the greenback in scores. 

The Dollar

The dollar index rose 0.3% on Friday, resuming the gains after a hiatus yesterday, and muscling up against a basket of major rivals, weighing on gold prices. 

Analysts are betting on a 0.75% rate in the next month, in turn underpinning dollar's standing. 

Quarterly Losses 

Gold prices have lost 6.7% in the second quarter of the year, the first such loss in the last three quarters. 

The Fed took a historic decision this month to hike rates by 0.75% to 1.75%, the highest hike since 1994.

Bank of England hiked rates by 25 basis points to 1.25%, the fifth such increase in a row.

Swiss Central Bank decided to hike rates by 50 basis points at the June 16 meeting to minus 0.25%, the first such increase since 2007, while analysts expected no change at minus 0.75%.

Higher interest rates weaken demand on gold prices as it becomes less attractive as an investment.

The SPDR

Gold holdings at the SPDR Gold Trust fell 2.32 tones yesterday, the eighth decrease in a row, to a total of 1,050 tones, the lowest  since May 17.