Market on Alert: Gold Loses Momentum
Gold prices fell during Tuesday's trading (July 28) ahead of the Federal Reserve's interest rate decision. Spot gold weakened by 1.1% to US$4,032.42 per troy ounce, while August futures contracts dropped to US$4,032.40.
Pressure on gold stemmed from the US dollar holding near one-month highs. A strong dollar makes gold more expensive for buyers using other currencies.
Gold prices have fallen approximately 24% since the US-Israel conflict with Iran began in late February. Markets are concerned that the war could drive inflation and keep interest rates elevated for longer.
Investors are now awaiting the Fed's decision and comments from Chair Kevin Warsh on Wednesday. The market sees a 69% probability that interest rates will remain unchanged, while the likelihood of a hike in September stands at 77%.
US PCE inflation data, due for release on Thursday, will also be a focus for the market. Commerzbank cut its year-end gold price forecast by US$300 to US$4,500 per troy ounce, as expectations of high interest rates continue to dampen demand for gold ETFs.
Other precious metals also weakened; silver fell 2.2% to US$57.10, platinum dropped 1.4% to US$1,599.26, and palladium slid 2.4% to US$1,260.13. Gold could remain under pressure if the Fed signals further interest rate hikes. (arl)
Source: Newsmaker.id
