2023-06-29 19:54:08
Gold slips to its lowest level in 3 months following central banks hinted at raising interest rates
Gold prices fell to their lowest levels in more than three months today, Thursday, falling for the third session in a row, as major central banks repeated talk of monetary tightening to curb high inflation.
Spot gold fell 0.1% to $1,905.59 an ounce by 07:49 GMT, following earlier hitting its lowest since mid-March.
US gold futures fell 0.4%, to record $1913.80 an ounce.
Jerome Powell, Chairman of the Federal Reserve (the US Central Bank), did not rule out raising interest rates at the next meeting of the bank, in light of the expectations of the leaders of the major central banks in the world for more monetary tightening.
The precious metal has fallen 3% so far in June, and looks set to end the quarter lower for the first time since September 2022, as traders reduce expectations regarding the end of the rate hike cycle.
Raising interest rates leads to a decline in investment in gold, which does not yield a return, since interest rates represent an opportunity cost for buyers of the precious metal.
On Wednesday, Powell said more interest rate hikes are likely at upcoming central bank meetings, adding that he does not rule out raising the cost of borrowing at the policy-setting meeting at the end of July, and possibly the immediate following.
According to the “Feed Watch” service of the “CME Group”, investors expect 82% of interest rates to be raised at the next US central meeting in July.
And the dollar index rose once morest a group of major currencies today, Wednesday, by 0.4%, which makes gold less attractive to buyers abroad.
As for other precious metals, silver rose in spot transactions by 0.3% to $22.79 an ounce, and platinum rose 0.8% to $917.90.
Palladium rose 0.3% to $1,252.16, still above its lowest level in four and a half years, which it recorded in the last session at $1,208.50.
(Archyde.com, The New Arab)
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