Gold falls from its peak in two weeks with the rise of the dollar economy

Gold prices declined today, Monday, after touching the highest level in two weeks, with the dollar rising slightly from the low levels it recently recorded, but declining expectations of the Federal Reserve (the US central bank) raising interest rates limited the yellow metal’s losses.

• Gold fell in instant transactions by 0.5% to $4,153.5 per ounce at the time of writing the report, after recording earlier in the day the highest level since June 22.
• US gold futures for August delivery rose 1% to $4,167.5 an ounce.

“Gold still faces a disadvantage due to the strength of the dollar,” said Tim Waterer, chief market analyst at KCM Trade.

He added, “The minutes of the Federal Open Market Committee’s meeting this week will be closely followed in search of clearer signals regarding the direction of the Federal Reserve’s monetary policy. Investors will look for evidence of whether other committee members share (Board Chairman) Kevin Warsh’s tightening expectations or whether there is more tendency to ease within the group.”

The dollar rose 0.1%, which led to the rise of gold priced in the US currency relative to holders of other currencies.

Gold increased by more than 2% last week, ending a four-week losing streak, after lower-than-expected US jobs data eased concerns about continued inflation and rising interest rates.

Data released on Thursday showed a sharp slowdown in job growth in the United States during last June, and job increase data in the previous two months were revised downward, which indicated a slowdown in the labor market and prompted markets to lower their expectations regarding an interest rate hike in the near term.

According to the CME Fed Watch tool, traders now see that the probability of raising the interest rate next September is about 55%, down from more than 60% before the data was released.

Gold, which does not generate a yield, usually rebounds when interest rates fall.

JP Morgan said that demand for gold from major sectors would not be as strong as it had expected, and set a ceiling for the prices of the precious metal this year at $4,300 in the third quarter and $4,500 in the third quarter.
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As for other precious metals:

• Silver fell in spot transactions 1% to $61.77 per ounce, after earlier recording its highest level since June 23.
• Platinum fell 0.3% to $1,632.80 an ounce.
• Palladium fell 0.5% to $1,267.65 an ounce.