Gold slipped to a three-week low on Thursday, extending overnight losses after minutes from a Federal Reserve policy meeting signalled the US central bank could raise rates as soon as next month, boosting the dollar to multi-week highs. Gold is highly sensitive to rising rates, which increase the opportunity cost of holding the metal.
Spot gold had fallen 0.3 percent to $1,254.17 per ounce by 0642 GMT, after earlier in the session dropping to its lowest since April 28 at $1,251.65. It declined 1.7 percent the day before. US gold futures dipped 1.5 percent to $1,255.40. Spot silver and spot palladium slid to one-month troughs, while spot platinum touched its lowest in three weeks. "Just as the prospect of extended low rates and a weaker dollar provided commodities with considerable tailwinds earlier in the year, the reverse could be at work now," said INTL FCStone analyst Edward Meir. "As rising rates and a stronger dollar pressures prices lower, gold could be a front-casualty in such a retreat."