Gold fell for a second consecutive session as a flare-up in hostilities in the Middle East raised inflation concerns and raised expectations that the U.S. Federal Reserve will keep interest rates high for an extended period.
Spot gold prices fell 1.2% to $4,072.49 per ounce. US gold futures for next August delivery fell 0.8% to $4,081.30.
more stress
“Renewed hostilities in the Gulf have renewed concerns about inflation, with the Federal Reserve warning that it will tighten monetary policy. This will put further pressure on gold through higher bond yields and a stronger dollar,” said Saxo Bank analyst Ole Hansen.
He added: “Reduced liquidity during the summer holiday period, as well as focus on the Middle East and rising oil prices, are all key factors that could push gold prices out of the current consolidation range of $3,900 to $4,200.”
increase interest
Traders now expect 71% of U.S. interest rates to rise next September, up from 63% last week, according to Feedwash Services.
This week, all eyes will be on new Federal Reserve Chairman Kevin Warsh’s first semi-annual testimony to Congress.
This week also saw the release of major U.S. economic indicators, including the CPI, producer price index, June retail sales, and weekly unemployment claims.
As for other precious metals, silver fell 1.6% in spot trading to $58.8795 an ounce, platinum fell 0.3% to $1,622.72 and palladium fell 0.7% to $1,267.46.
Gold fell for a second straight session as renewed conflict in the Middle East raised inflation concerns and increased expectations that the Federal Reserve will keep interest rates high for an extended period of time.
Spot gold prices fell 1.2% to $4,072.49 per ounce. US gold futures for August delivery fell 0.8% to $4,081.30.
additional pressure
“Renewed fighting in the Gulf has reignited inflation concerns and there are signs that the Federal Reserve will tighten monetary policy. This will put further pressure on gold through higher bond yields and a stronger dollar,” said Saxo Bank analyst Ole Hansen.
He added: “The focus on the Middle East and rising oil prices, as well as reduced liquidity during the summer holiday period, are all important factors that could push gold prices out of the current $3,900 to $4,200 range.”
interest rate hike
Traders now expect a 71% chance of a rate hike in the U.S. in September, up from 63% last week, according to the FedWatch service.
This week’s attention will be on the first semi-annual testimony to Congress by new Federal Reserve Chairman Kevin Warsh.
A series of key U.S. economic indicators are also expected to be released this week, including the consumer price index, producer price index, June retail sales and weekly new jobless claims.
Among other precious metals, silver fell 1.6% in spot trading to $58.8795 an ounce, platinum fell 0.3% to $1,622.72 and palladium fell 0.7% to $1,267.46.
