By Bharat Gautam

(Reuters) – Gold prices fell on Monday, to the lowest level in over two weeks. This was due to bets that an aggressive and hawkish U.S. Federal Reserve approach towards tightening monetary policies would boost the dollar and increase demand for bullion.

It was 0.3% below $1,923.74 a pound, at 0321 GMT. This is its lowest point since April 7. U.S. fell 0.6% to $1,923.30

The gold price is close to 3%, which theoretically is supposed to tip the scales, but it’s more about actual yields, Stephen Innes, managing director at SPI Asset Management, stated that this is not about gold. [US/]

On Friday, traders placed bets on the possibility that the U.S. central banking will increase its interest rate by half a percentage point after the Fed’s May meeting.

In the last two years, the dollar has held at its highs. It made greenback-priced metal more costly for all currency holders. [USD/]

Rising U.S. short term interest rates and higher yields make gold very sensitive. These factors increase the opportunity cost to hold non-yielding silver. However, it is considered a reliable store of value in times of economic or political crisis.

Innes stated that gold still retains some intrinsic value even when the economy slows down. This is because banks won’t raise their interest rates. He added: “The markets are pricing in rates rates rates rates. However, what happens if an economy begins to tank very rapidly?

As Russia’s invasion entered its third month, U.S. officials made their way to Kyiv on Sunday night and met with President Volodymyr Zelenskiy.

Spot silver fell 1% to $23.89 an ounce. Platinum eased 0.4% at $927.00 and palladium dropped 2.9% to $2.305.69