Gold Prices Are Falling on Global Markets: The Main Reasons
29 June 16:14
Gold prices fell by more than 1% on Monday, June 29, as the exchange of strikes in the Persian Gulf has heightened inflation fears, reinforcing expectations of a Fed rate hike and putting pressure on the precious metal, which does not generate interest income. This was reported by "Komersant Ukrainian", citing Reuters.
The spot price of gold fell 1.27% to $4,036.17 per troy ounce. Prices fell 1.7% on Friday and could post a decline of more than 10% for the month—the fourth consecutive monthly decline.
Iran and the U.S. have agreed to cease hostilities in the Persian Gulf and resume negotiations regarding the dispute over the Strait of Hormuz, a U.S. official said on Sunday—a development that offers hope for preserving the peace agreement, which had been threatened by several days of mutual strikes.
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On Sunday, Iran attacked U.S. military facilities in Kuwait and Bahrain using missiles and drones, shortly after U.S. President Donald Trump threatened that the Islamic Republic would cease to exist if it did not abide by the ceasefire agreement.
“Gold prices are under pressure as investors remain lack certainty regarding the progress of peace talks between the U.S. and Iran,” said ActivTrades analyst Ricardo Evangelista, adding that an escalation of the conflict could lead to rising energy prices.
Central bank policy is the most hawkish factor. Markets are pricing in three Fed rate hikes in 2026, with the probability of a rate hike in September estimated at approximately 61%, according to the CME’s FedWatch tool.
The market’s focus is on ADP’s U.S. employment data for June and the U.S. labor statistics, which will be released this week.
“U.S. nonfarm payrolls are expected to come in stronger than estimates later this week and could reinforce expectations of a more hawkish Fed, which would set the stage for a breakout and consolidation (gold) above the $4,000 level,” Evangelista said.
Palladium rose 0.21% to $1,211.67 per ounce, while silver fell 2.5% to $57.68 per ounce. The price of platinum fell by 1.53% to $1,589.55.
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