FX.co ★ Gold Slips From Five-week High On Rate-hike Worries

Gold prices slipped from five-week highs on Monday amid concerns that the U.S. Federal Reserve may raise interest rates aggressively to control inflation.

Spot gold dropped 0.8 percent to $1,856.71 per ounce, while U.S. gold futures were down 0.9 percent at $1,859.60.

Hotter-than-expected inflation data released on Friday hardened expectations the Federal Reserve will keep raising rates through the September meeting and beyond.

Data showed the annual rate of consumer price growth accelerated to 8.6 percent in May from 8.3 percent in April, showing the biggest surge since December 1981.

The safe haven dollar gained towards fresh two-decade highs versus major rival currencies and the 2-year U.S. Treasury yield moved higher amid expectations of half-point Fed rate hikes this week and again in July and September.

The next Fed policy decision comes on Wednesday and the policy statement will contain updated projections for economic growth, the unemployment rate, inflation, and future interest rates.

The Bank of England and the Swiss National Bank are also expected to raise interest rates at their meetings this week, but little change is expected from the Bank of Japan.