The price of gold has reached its lowest level in two and a half years. The metal is weighed down by the strength of the dollar and the prospect of further interest rate hikes by the U.S. Federal Reserve to bring down inflation.

Spot gold was down 0.3 percent at $1,638.59 an ounce by 0053 GMT, after hitting its lowest level since April 2020 earlier in the session. U.S. gold futures were down 0.6 percent at $1,645.8. Rising interest rates are reducing gold's appeal as the metal pays no interest. The price of gold has fallen more than 20% since it broke through the key $2,000 per ounce mark in March.

Premiums for gold in China, the main consumer, rose last week, helped by strong demand for bullion, while prices in India traded at a discount for the first time in four weeks due to a rise in domestic rates.

Spot silver fell 0.8% to $18.68 an ounce, platinum rose 0.7% to $860.13 and palladium gained 0.4% to $2,076.10.