Gold Prices Are Falling on Global Markets: What’s Behind the Trend
19 June 14:09
On Friday, June 19, the price of gold is falling, ending the week in the red amid a strengthening U.S. dollar and “hawkish” signals from the Federal Reserve (Fed). This was reported by "Komersant Ukrainian", citing Interfax-Ukraine.
As of 12:25 p.m., the spot price of the precious metal had fallen by 1% to $4,167.07 per ounce and was down 1.4% since the start of the week. August gold futures on the Comex fell 1.5% to $4,181.8 per ounce.
Analysts at Goldman Sachs Group Inc. lowered their gold price forecast for the end of this year by $500 per ounce—to $4,900 per ounce.
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The new forecast still anticipates that the precious metal will rise in price in the second half of the year, but not as significantly as previously expected, according to Goldman’s report. They see a risk of a decline in the price of gold in the near term but expect it to rise in the medium term.
The downward revision is linked to weaker expectations regarding inflows into gold-backed ETFs, analysts note. This is due to a revision of forecasts regarding the timing of the Fed’s rate cut: previously, Goldman experts believed that the U.S. central bank would ease policy as early as December 2026, but now they expect this no earlier than June 2027.
This week, the Fed kept its benchmark rate in the 3.5–3.75% range. At the same time, Fed officials significantly raised their inflation forecast for the U.S. this year—to 3.6% from the 2.7% projected in March— and the “dot plot” showed that half of them expect a rate hike of at least 25 basis points by the end of this year.
The prospect of rate hikes traditionally puts pressure on the precious metals market, as investments in these assets do not generate interest income.
If the Fed raises rates, “demand for gold as a hedge against macroeconomic risks will decline more steadily.” In this scenario, the price of gold will reach about $4,400 per ounce by the end of the year, Goldman analysts predict.
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