The decline came after hawkish messages from the Federal Reserve this week, coinciding with limited activity in Asian markets due to the closure of China and Hong Kong markets on the occasion of the Dragon Boat Festival holiday.
Gold was exposed to additional pressure with the rise of the dollar to its highest level in a year, as the rise of the US currency usually leads to an increase in the cost of purchasing the precious metal for holders of other currencies, which weakens global demand for it.
Tim Waterer, chief market analyst at KCM Trade, said that gold’s gains that followed the announcement of the peace agreement between the United States and Iran did not last long, after the dollar returned to rising strongly with support from a more stringent tone adopted by the Federal Reserve Board, led by its new chairman, Kevin Warsh.
He added that Warsh’s firm stance limited the impact of positive geopolitical developments, stressing that monetary policy remains the most influential factor in market movement.
Pressure on gold increased after Federal Reserve forecasts showed that 9 out of 19 officials now expect the need to raise interest rates this year, in light of continuing concerns about inflationary pressures within the US economy.
According to the latest figures, gold fell in spot transactions by 2.1% to $4,121.95 per ounce, recording its lowest level since June 11, while its weekly losses amounted to about 3.8%.
Losses affected other metals, as silver fell 3.9% to $63.25 per ounce, platinum fell 2.7% to $1,649.63, and palladium fell 2.3% to $1,249.69. (investing)
