Gold maintains weekly price drop amid US inflationary pressure

Gold prices maintain weekly decline amid signs that US President Donald Trump's customs program is beginning to create inflationary pressure in the US and could jeopardize interest rate cuts, UNN reports, citing Bloomberg.

Details

The price of gold bullion was around $3340 per ounce after a weekly decline of 1.8%. Data last week showed that US wholesale inflation accelerated the most in three years in July, prompting traders to reduce bets on a Federal Reserve rate cut next month. Higher interest rates negatively affect gold, which does not pay interest.

Raphael Bostic, president of the Federal Reserve Bank of Atlanta, said after a three-day trip through the southeastern US that customs tensions are real and high borrowing costs are reducing company profits. Markets still expect up to two cuts this year.

Traders will monitor any progress from Trump's meeting with Ukrainian President Volodymyr Zelenskyy, intended to define the terms of a potential peace agreement he discussed with Kremlin head Vladimir Putin at a meeting last Friday in Alaska. A long-term ceasefire or continued conflict could affect gold demand.

Gold prices are consolidating in a range not much lower than the record high of $3500 per ounce reached in April.

Gold price forecast raised to $3500 for the next three months - Citi04.08.25, 10:29 • 3908 views

This year, the metal's price is still up by more than a quarter, as rising geopolitical tensions, fears about the stability of the global economy, and diversification of dollar assets support this safe-haven asset, the publication writes.

Gold prices fell 0.1% to $3340.08 per ounce as of 8:35 AM Singapore time. The Bloomberg Dollar Spot Index remained stable. Silver and platinum were virtually unchanged in price, while palladium rose.

Recall

Despite the previous increase in the value of monetary gold as a method of preserving money, its popularity as a jewelry metal has significantly decreased. As noted by financial expert Olena Sosedka in a comment for UNN, this was most reflected in key markets — India and China.

"Gold prices in the global market have become so high that it has reduced the popularity of buying gold jewelry. This was most reflected in key markets such as India and China, but a global decline in demand is felt worldwide. Due to rising prices, former fans of gold jewelry are increasingly preferring other precious metals. Instead, gold is more often considered as a way to preserve capital in conditions of economic instability and high inflation. And not as an item of everyday use," said Olena Sosedka.

In addition, analysts at Goldman Sachs, one of the largest and most influential investment banks in the world, predict that if the dollar continues to fall, the value of gold will reach $3,700 per troy ounce by the end of 2025.