Gold prices fell on Thursday to near their lowest levels in more than 7 months, under pressure from a rising US dollar and growing market bets on interest rate hikes in the United States.

Market data by 07:20 GMT showed spot gold down 0.4% to trade at $3983.20 an ounce.

U.S. gold futures for August delivery fell 0.31% to $3,996.30 an ounce as investors awaited key inflation data.

Matt Simpson, senior analyst at StoneX, was quoted as saying that gold is currently experiencing a clear bearish momentum in light of the continued strength of the dollar.

CME Group's FedWatch tool explained that markets are now expecting 3 US interest rate hikes this year, with a 67% probability of raising them next September.

Other precious metals recorded concurrent declines, with silver down 0.1% to $57.37, platinum down 0.8% to $1566.25, and palladium alone up 0.4% to $1,171.25 an ounce.

Dollar Holds Gains

The U.S. dollar maintained its strong gains heading for its biggest monthly gain in nearly a year, supported by strong U.S. economic data and easing interest rate cut bets.

Trading data confirmed that the dollar index against a basket of major currencies reached a 13-month high of 101.8 points.

The dollar hit a more than 4-decade high against the Japanese yen at 161.73 yen, a 7-month high against the pound and an 11-month high against the Swiss franc.

The strength of the U.S. currency has increased the cost of buying the precious metal for investors holding other currencies, and has also briefly pushed the price of Bitcoin below $60,000 for the first time since 2024.

Japanese stocks rebound

Japanese stocks jumped on the Tokyo Stock Exchange, led by technology and artificial intelligence companies, benefiting from the positive outlook for global semiconductor companies.

The closing indicators showed the Nikkei 225 index rising 3.72% to 71754.53 points, while the broader Topix index climbed 1.34%.

Micron Technology reported strong quarterly earnings and revenue forecasts, confirming customers' commitment to purchase $22 billion worth of memory chips, pushing its stock up 12% in post-close trading.

The data reflected positively on AI-related companies in Japan, with SK Hynix up more than 11%, Advantest jumped 11.8%, and Tokyo Electron up 7.9%.

The energy sector, on the other hand, came under selling pressure as oil prices continued to fall, with the index of mining companies falling by 3.2% and the share of "Inpex" by 3.53%.