Gold fell to a six-week low on expectations the Federal Reserve and other central banks will keep raising interest rates to curb inflation. Silver dropped to the lowest in two years. 

Bullion dropped for a fifth day as the dollar and Treasury yields rose, damping the allure of the non-interest bearing precious metal.

Cleveland Fed President Loretta Mester said Wednesday the US central bank needs to raise its benchmark rate above 4% by early 2023 and leave it there through year-end. That’s the latest in a series of hawkish messages coming from US policy makers.

Money markets are also pricing in 125 basis points of tightening by the European Central Bank by October as policy makers step up their fight to contain inflation. The outlook for more global tightening pushed gold to a fifth monthly drop in August, the longest losing run in four years. 

Spot gold dropped 0.3% to $1,705.86 an ounce as of 10:35 a.m. in Singapore after touching the lowest level since July 21 earlier. The Bloomberg Dollar Spot Index rose 0.2%. Silver fell 1.3%, while palladium and platinum also declined.

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