Gold hits near 7-week low as rising U.S. yields lift dollar

Reuters/Jan Harvey/10-02-17

Gold fell to its lowest since mid August on Monday as rising U.S. Treasury yields pushed the dollar higher, while concerns over violence during Catalonia’s independence vote at the weekend weighed on the euro.

Expectations that the Federal Reserve will push ahead with a third U.S. interest rate hike this year, upbeat U.S. data and talk of a possibly more hawkish successor to Fed Chair Janet Yellen all lifted Treasury yields.

…”The recent selloff is mostly related to a stirring of the reflation trade following the announcement by the Trump administration of the long-awaited tax reform proposal,” Mitsubishi analyst Jonathan Butler said.

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