On Thursday, gold prices fell to their lowest level in five months as the U.S. dollar and Treasury yields rose as recent positive economic data reinforced expectations that the Federal Reserve will continue tightening monetary policy.
As of 03:35 GMT, spot gold was stable at $1,893 per ounce after falling to its lowest price since March 15 at $1,888.30. To $1,922.60, U.S. gold futures saw a 0.3% decline.
According to the minutes of the July Fed meeting, “most” officials still gave the fight against inflation top priority, but “some participants” warned against raising interest rates too high.
Benchmark The dollar rose to its highest level since mid-June as a result of 10-month high 10-year U.S. Treasury yields, which also attracted investors away from non-interest-bearing gold.
There are faint signs of stability for spot gold prices today, according to Matt Simpson, a senior analyst at City Index. “Whilst the FOMC minutes saw the U.S. dollar and yields strengthen further to weigh on gold, there are tentative signs of stability today,” Simpson said.
“Given that U.S. yields and the dollar index are circling around important swing highs, I believe we’re approaching a potential inflection point.”
Given that it has broken two important supports, spot gold, according to Reuters technical expert Wang Tao, may drop to $1,879 an ounce.
According to a note from NAB Commodities Research, “We expect to see continued volatility in the gold price as the market continues to respond to commentary on U.S. rates.”
Rate reductions anticipated in 2024 will probably be required to offer benefits to gold prices, they added.
Recent positive U.S. economic figures have defied predictions of a recession, which has decreased investor interest in gold, which is frequently sought after as a secure store of wealth during economic upheaval.
Other metals saw gains of 0.3% to $22.46 per ounce for spot silver and 0.3% to $885.15 for platinum, which had fallen to its lowest levels since October. Adding 0.4% to $1,213.94 was palladium.