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’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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