Gold prices fell on Wednesday and were on
track to post their longest streak of monthly losses since 2018
as traders anticipated more interest rate increases by central
banks to combat red-hot inflation.
Spot gold fell 0.8% to $1,710.70 an ounce by 0956
GMT. Bullion has lost about 3% so far in August, set for its
fifth straight month of declines.
US gold futures dipped 0.8% to $1,722.90.
Expect gold to fall to $1,600 by year-end as Federal Reserve
chair Jerome Powell’s determination to bring down inflation
through tighter monetary policy will result in higher US real
rates and a stronger dollar, said UBS analyst Giovanni Staunovo.
Inflation has hit multi-decade highs in many parts of the
world, forcing central banks to tighten monetary policy. Gold is
highly sensitive to rising US interest rates, which increase
the opportunity cost of holding non-yielding bullion.
“The Fed does not have intentions to significantly ease in
the near term,” said DailyFX currency strategist Ilya Spivak.
“Their focus is on inflation.”
Traders will look at the US private payrolls report due at
1215 GMT for further clues on the resilience of the American
“(But) don’t expect the data to materially affect the
direction of the gold price, although a strong number could
drive it lower,” said Michael Hewson, chief market analyst at
CMC Markets UK.
Spot silver fell 2.5% to $18.03 an ounce and was set
for its biggest monthly drop since September 2020.
Platinum slipped 0.7% to $841.40 and was headed for a
more than 6% drop over the month.
Palladium , meanwhile, dipped 0.4% to $2,078.81.
(Reporting by Arundhati Sarkar and Eileen Soreng in Bengaluru
Editing by David Goodman