Dollar hits three-month high on rate view, pans gold

20-Jul (Reuters) — The dollar jumped to three-month highs on Monday, extending its recent gains as expectations of rising U.S. interest rates gathered pace, while gold prices plunged to their lowest in more than five years.

The greenback posted its best weekly performance in about two months last week, after Federal Reserve Chair Janet Yellen reiterated that U.S. interest rates will probably rise later in the year. Data on Friday showing a pickup in U.S. consumer prices and housing starts also helped the rally.

The strength of the dollar weighed on gold, which plunged as much as 4 percent. Platinum fell as much as 5 percent to its lowest since February 2009.

…Gold dived, touching a five-year low as the U.S. interest rate outlook and its consequences for the dollar led sellers in China dumped the metal.

“The Asian market missed the action on Friday when U.S. players were already attempting a break of $1,130, a major support level, and has pushed prices much lower today,” ABN Amro analyst Georgette Boele said.

[source]

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