decreased gold pricesToday, Friday, the attractiveness of the yellow metal declined due to the rise in the dollar and fears of a sharp increase in interest rates by the major central banks in order to curb inflationary pressures.
And gold fell in spot transactions 0.2% to $ 1714.72 an ounce, according to “Archyde.com”.
Prices fell to the lowest level in more than a year at 1680.25 dollars, yesterday, Thursday, before closing up 1.3%.
Gold is still heading for its first weekly gain in six weeks, up nearly 0.5%.
And US gold futures rose 0.1% to $ 1714.90 an ounce.
The dollar rose 0.2% against rival currencies, which makes gold priced in the US currency more expensive for buyers of other currencies.
“Gold is on a downtrend and rallies that start are short-lived because gold is under pressure from the fact that inflationary expectations are in decline,” said Edward Meir, analyst at ED&F Capital Markets.
The European Central Bank joined with its global peers in the fight against soaring inflation, raising interest rates more than expected on Thursday, even as the euro zone economy suffered from the impact of the Russian war on Ukraine.
A meeting of the Federal Reserve (the US central bank) on policy is scheduled for next week.
Policy makers are expected to raise interest rates by 75 basis points.
“We are waiting to hear how tightly they will be guiding about interest rates, if they still think inflation is a problem or they are going to keep raising interest rates, that will have a very negative impact on gold,” Meir said.
Higher interest rates increase the opportunity cost of owning the precious metal, which does not generate returns.
As for other precious metals, silver fell in spot transactions 0.3% to $18.78 an ounce, while platinum increased 0.3% to $873.92, while palladium rose 0.2% to $1895.86.