Gold hits over 3-week low on strong US dollar, Fed rate-hike worries

Gold prices fell for a sixth straight session on Monday to hit their lowest in more than three weeks, weighed down by a robust dollar and expectations of further interest rate hikes from the U.S. Federal Reserve to tame surging inflation.

FUNDAMENTALS

* Spot gold was down 0.1% at $1,746.06 per ounce, as of 0131 GMT, after hitting its lowest since July 28 at $1,743.83 in early Asian trading. The metal lost nearly 3% last week.

* U.S. gold futures eased 0.2% to $1,758.80.

* The dollar rose 0.1% to a more one-month high against its rivals, making gold more expensive for buyers holding other currencies. [USD/]

* The Fed will raise rates by 50 basis points in September amid expectations inflation has peaked and growing recession worries, according to economists in a Reuters poll.

* Traders are now pricing in around a 46.5% chance of a 75-basis-point rate hike in September and a 53.5% chance of a 50-bp increase.

* The U.S. central bank needs to keep raising borrowing costs to bring high inflation under control, a string of its officials said last week.

* Gold is highly sensitive to rising U.S. interest rates, as these increase the opportunity cost of holding non-yielding bullion.

* Focus this week will be on comments by Fed Chair Jerome Powell when he addresses an annual global central banking conference in Jackson Hole, Wyoming, on Friday.

* SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.32% to 989.01 tonnes on Friday from 985.83 tonnes on Thursday. [GOL/ETF]

* Gold demand in India improved last week as domestic prices dropped to a more than two-week low, while volumes were sombre in other Asian centres. [GOL/AS]

* Spot silver gained 0.2% to $19.06 per ounce, platinum fell 0.3% to $893.38, and palladium rose 0.2% to $2,129.21.