By Gina Lee

Investing.com – Gold was down on Thursday morning in Asia, falling to a two-month low. A weaker demand and an impending U.S. interest-rate hike dampened sentiment about the asset that is considered safe to have.

After hitting their lows on Feb. 24, they gained 0.5% to $1,878.10 at 12:57 ET (4:57 GMT). On Thursday, the dollar rose to 103.28, a level that is normally inverted relative to gold. It would reach levels last seen in late 2002 if it were to push higher than 103.82.

Gold is holding well over $1,900, but it has come under pressure from the dollar and the underlying factor that the U.S. Federal Reserve will likely raise interest rates 50 basis points within the week ahead, Brian Lan, GoldSilver Central managing Director, told Reuters.

The benchmark 10-year U.S. Treasury yields remained stable, as investors wait for more information on the Fed’s “restrictive” policy to fight inflation. While the Federal Reserve decided to keep its interest rates at -0.10%, it published an economic bulletin.

Investors are likely to have decided to move on from gold, Lan stated, noting that the prices of gold have failed to rise despite Russia’s invasion Ukraine on February 24th and the rapid inflation. Lan also said that China lockdowns as a response to recent COVID-19 epidemics had impacted the demand for the most important consumer.

The World Gold Council reports that global demand rose for gold during the first quarter of 2022, making it the most high-demand period in more than three years. Investors worried about Ukraine’s conflict and rising inflationary pressures drove this increase.

Other precious metals saw a 0.1% decline and a 0.4% decrease to $914.17. While the price rose 1.2%.