Gold prices fell on Tuesday as investors braced for a period of higher interest rates in the United States and Europe. Spot gold fell 0.7 percent to $1,725.60 an ounce by 1915 GMT, after hitting a one-month low of $1,719.56 on Monday.
And US gold futures fell 0.8 percent to settle at $1,736.30 an ounce. “There is continued pressure on gold from (Federal Reserve Chairman Jerome) Powell’s comments last week that raised expectations for further monetary tightening,” said David Meijer, director of metals trading at High Ridge Futures. And because gold is a non-returning asset, it will face more competition.”
At a conference of central banks in Jackson Hole, Wyoming, the US Federal Reserve and the European Central Bank demonstrated a tough stance and pledged to do everything possible to tame high inflation even if growth was negatively affected.
Most traders now expect a 75 basis point increase in US interest rates in September. But Major said gold could see some inflows of safe investment at some point if the economy starts to slow. The dollar index was stable after rising 0.3 percent earlier. A stronger greenback would make the precious metal more expensive for holders of other currencies.
Among other precious metals, spot silver fell 1.6 percent to $18.45 an ounce, while platinum fell 1.8 percent to $847.24. Palladium fell 2.9 percent to $2,083.50. (Archyde.com)