The price of gold stabilized near the $4,000 per troy ounce mark after an almost 3% drop the previous day. The market is under pressure from the strengthening of the US dollar and expectations of tighter monetary policy from the Federal Reserve System, Bloomberg reports, writes UNN.
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The dollar index rose by 0.8% this week, making gold more expensive for buyers using other currencies. At the same time, silver, after falling by almost 7%, also stabilized, dropping below $60 per ounce for the first time since December.
Market reacts to Fed signals
Additional pressure on precious metals is exerted by expectations of interest rate hikes in the US. Representatives of the Federal Reserve System are increasingly signaling support for tighter monetary policy, which reduces the attractiveness of gold compared to income-generating assets.
According to the agency, at the end of January, gold reached an all-time high of around $5,600 per ounce, but by June its price had fallen more than 20% from that level, which is traditionally considered the start of a bear market. Bloomberg cites the escalation of the conflict between the US and Iran as one of the factors for this decline, which increased inflationary pressure on the global economy.
Gold fell below $4,100 per ounce for the first time in two weeks24.06.26, 06:52