(Bloomberg) -- Gold headed for the biggest monthly drop in more than four years as the dollar strengthened, with investors weighing the outlook for monetary policy after the Federal Reserve’s hawkish shift.
Risk sentiment is also in play as U.S. shares edged up to a record on economic optimism and signs that vaccines can counter a highly infectious coronavirus strain. Moderna (NASDAQ:MRNA) Inc. said its vaccine produced protective antibodies against the delta variant, which has spread around the world since emerging in India. A gauge of the greenback rose, adding pressure on the precious metal.
Bullion has resumed a downtrend as the Fed pulled forward its expected timing and pace of interest-rate increases, and started a discussion of when to taper asset purchases. Fed Bank of Richmond President Thomas Barkin said Tuesday the U.S. labor market isn’t close to its pre-pandemic levels and he wants to see much more progress before tapering.
Spot gold was little changed at $1,761.22 an ounce at 7:36 a.m. in Singapore, after dropping to $1,750.75 on Tuesday, the lowest intraday level since April 15. Prices are down 7.6% this month, the most since November 2016. Silver and platinum steadied, while palladium rose. The Bloomberg Dollar Spot Index is up 2% in June, heading for the biggest monthly gain since March 2020.
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