Gold prices fell significantly over the course of the week: what’s behind the trend
17 July 19:12
Gold could post its biggest weekly decline in the past six weeks on Friday: the escalation of the conflict between the U.S. and Iran has pushed up oil prices, intensifying inflationary pressures and reinforcing expectations of a Fed rate hike. This is reported by "Komersant Ukrainian", citing Reuters.
The spot price of gold rose 0.67% to $3,996.73 per troy ounce, having earlier hit its lowest level since July 1 during the session. The precious metal has lost 3% since the start of the week—its worst weekly performance since June 1—as the escalation in the Middle East outweighed optimism over the decline in U.S. inflation in June.
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“Gold is making cautious gains today after the precious metal’s drop below the $4,000 mark attracted traders looking for attractive buying opportunities,” said Tim Waterer of KCM Trade.
At the same time, the analyst noted that geopolitical risks in the Middle East remain, and concerns about inflation and Treasury yields are the main factors weighing on gold.
Dallas Fed President Lori Logan was the first member of the Federal Open Market Committee to openly call for an interest rate hike. Federal Reserve Vice Chair Philip Jefferson also signaled that he is open to raising borrowing costs if inflation does not slow down in the near future.
Traders estimate the probability of a rate hike in December at 73%, according to the CME’s FedWatch tool.
Palladium fell 0.6% to $1,241.93 per ounce, while silver remained largely unchanged at $55.49 per ounce.
The price of platinum fell 2% to $1,585.07.
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