Gold prices fell by more than 1% today, Tuesday, on track to record their largest monthly decline since October 2008, with the impact of the uncertainty of the situation in the Middle East diminishing in the face of expectations of raising US interest rates to reduce high inflation.
How much was the price of an ounce of gold?
The price of gold in spot transactions fell 1.5% to $3,956.92 per ounce by 02:21 GMT, recording a loss of 12.7% since the beginning of the month, in what would be the fourth monthly decline in a row.
US gold futures for August delivery also fell 1.7% to $3,969.30.
The precious metal is on its way to record its first quarterly decline since 2024, and the largest since the second quarter of 2013, as the war on Iran led to a sharp rise in energy prices, raising fears of inflation and expectations of raising interest rates.
“There is high inflation, expectations of higher interest rates and a strong dollar, and this trumps all the other factors that are usually associated with higher gold prices,” said Edward Meir, an analyst at Marex.
Expectations of interest rate hikes
The CME Group’s Fed Watch tool indicates that traders expect the Federal Reserve (the US central bank) to raise interest rates three times this year, with a 64% probability of raising them in September.
Investors are now awaiting ADP employment data and June non-farm payrolls data, both scheduled for release this week, to better assess the Federal Reserve’s position on raising interest rates.
The dollar is on track to achieve monthly gains for the second time, making the precious metal more expensive for holders of other currencies.
Oil is heading to record the largest decline
As for oil prices, they are heading to record their largest quarterly decline since 2020, with investors awaiting the results of the Iranian-American talks in Doha this week, despite Iran’s confirmation that no date has been set for any meeting.
Mir expects a price for the precious metal in the range of $3,500 and $4,400 in the second half of the year.
How many other minerals recorded?
As for other precious metals, the price of silver in spot transactions fell 2% to $57.13 per ounce, platinum lost 1.1% to $1,557.21, and palladium fell 0.4% to $1,208.17.
The three metals are on their way to record quarterly and monthly losses.
