Gold prices fell yesterday, Monday, with the rise of the dollar and US bond yields, as dealers await a busy week witnessing the issuance of inflation data in the United States and the decision of the Federal Reserve (US Central Bank) regarding interest rates.
Spot gold fell 0.5 percent to $1951.40 an ounce by 1422 GMT. US gold futures also fell 0.6 percent to $1,965.80.
The dollar rose 0.1 percent, which increased the price of gold, which is priced in the US currency, to buyers around the world, while the slight rise in US bond yields made the yellow metal, which does not yield a return, less attractive.
“We start this week and gold prices are changing rapidly, like changing the face of a coin when it is tossed in the air,” said Bob Haberkorn, chief market strategist at (RGO Futures).
US CPI data for May are due on Tuesday, and PPI data for Wednesday, ahead of the Federal Reserve’s interest rate meeting later that day.
Haberkorn said, “In fact, if (the US central bank) stopped raising interest rates, this would push gold prices to rise sharply.”
Markets expect a 79 percent chance that the Fed will keep interest rates unchanged, and a 68 percent chance of raising them in July.
The European Central Bank will make a rate decision on Thursday and the Bank of Japan on Friday.
“Gold is trading on the assumption that US interest rates remain steady, but with any rally the precious metal will likely fall to $1,900 an ounce,” said Robert Rolling, an analyst at Kinesis Money, in a note.
As for other precious metals, silver in spot transactions fell 1.4 percent to $23.93 an ounce, and platinum lost 1.5 percent to $993.58, recording a decrease for the second month in a row.
However, palladium, which is used in automobile emissions control devices, rose 0.6 percent to $ 1,345.06, after hitting its lowest level since May 2019 on Friday.
“Palladium could reach more than $1,500 in the fourth quarter of this year, thanks to higher auto production, although that is subject to pressure from the possibility that automakers will draw from inventories,” said Jacob Smith, an analyst at Metals Focus.
