Gold wallows near 8-week lows

Gold prices inched higher in European trade on Thursday, but held near their lowest level in around eight weeks amid growing expectations for a U.S. interest rate hike next month.

Comex gold futures rose around $4.00, or about 0.3%, to $1,222.70 a troy ounce by 3:05AM ET (07:05GMT). Meanwhile, spot gold was at $1,222.30.

The yellow metal hit its lowest since March 15 at $1,214.30 on Tuesday amid fading demand for safe-haven assets.

Markets are pricing in around an 80% chance of a hike at the Fed’s June meeting, according to Investing.com’s Fed Rate Monitor Tool.

The metal is highly sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced.

The dollar index, which tracks the greenback against a basket of six major currencies, was at 99.46 in London morning trade, not far from a three-week high of 99.61.

The benchmark 10-year U.S. Treasury yield was at around 2.395%, within sight of a five-week peak of 2.416%.

There are a couple of economic reports Thursday, including weekly jobless claims and producer price inflation data both due at 8:30AM ET (12:30GMT).

Also on the Comex, silver futures gained 10.6 cents, or about 0.7%, to $16.31 a troy ounce. It fell to a more than four-month low of $16.06 on Tuesday.

Elsewhere in metals trading, platinum tacked on 0.9% to $918.00, while palladium added 0.2% to $801.10 an ounce.

Copper futures advanced 2.2 cents to $2.517 a pound. It slumped to the lowest level since January at $2.472 earlier this week amid renewed concern over China’s economic health.

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