Strong dollar pulls gold down

The price of 10-gram gold declined Rs2,315 to Rs392,263.The latest fall followed a Rs100 decline in the per-tola gold price on Saturday, when bullion closed at Rs460,236.In the international market, spot gold was down 0.6% at $4,350.39 per ounce by 11:40 am ET (1540 GMT), after falling more than 1% earlier to a session low of $4,322.19, as per Reuters.

US gold futures were down 0.8% at $4,388.40.Market expectations for further US monetary tightening have increased pressure on gold by supporting the dollar.

Traders now see an 88% chance of a December rate hike, according to the FedWatch Tool.

Gold generally faces pressure when expectations of higher interest rates increase, while a stronger dollar makes bullion more expensive for holders of other currencies.The market is also assessing comments from US Federal Reserve officials on persistent inflation.

Minneapolis Fed President Neel Kashkari has said inflation remains too high across sectors of the US economy, adding to expectations that monetary policy could remain restrictive.

Interactive Commodities Director Adnan Agar said international gold prices traded within a broad range of around $4,250 to $4,400 in the past 10 to 15 days, with the market yet to establish a clear new direction.

He said gold touched a high of $4,383 and a low of $4,322 during Monday's session and was trading around $4,354.According to Agar, movements in oil prices are also influencing bullion sentiment.

Although oil declined on Monday, the possibility of another increase in energy prices was keeping gold from establishing a stronger upward move.

He said physical demand for gold continued to increase, which could provide support to prices despite short-term volatility.

Agar added that there was a possibility of gold entering another upward leg in the coming month or thereafter, potentially reaching $5,000 or above.

He also said he expected downside to remain limited, with $4,100 representing a potential lower level under his market assessment.Meanwhile, the price of silver remained unchanged at Rs7,100 per tola in the domestic market.

Moreover, the Pakistani rupee gained Rs0.03 to close at Rs277.22 against the US dollar in the inter-bank market.