Gold prices fell to their lowest level in more than three weeks
The price of gold fell on Wednesday to its lowest level in more than three weeks. The market is under pressure from a strengthening dollar amid fears of a new wave of global inflation.
The spot price of gold fell 0.6% to $4,302.20 per ounce. During trading, it fell to a level not seen since August 7. December gold futures in the U.S. fell 1.1% to $4,349.80 per ounce.
Rising oil prices, driven by escalating tensions between the U.S. and Iran, are heightening inflationary risks. Against this backdrop, investors are buying the dollar more aggressively, pushing its exchange rate to a two-week high. A stronger dollar makes gold more expensive for buyers using other currencies.
Expectations regarding the U.S. Federal Reserve’s policy are putting additional pressure on the precious metal. Traders estimate the probability of a Fed rate hike this month at 68%. Higher interest rates reduce gold’s appeal to investors, as it does not generate interest income.
On Wednesday and Friday, the U.S. will release key employment data that could influence the Fed’s future decisions.
Meanwhile, other precious metals also fell in price: silver by 1%, platinum by 1.4%, and palladium by 0.7%.
Source: Reuters
In August, the price of gold rose by about 9%, indicating a recovery in demand for the precious metal as a safe-haven asset. After a recent drop from its all-time high, its price has once again approached $4,400 per ounce.
Gold prices fell below $4,500 per ounce for the first time since February.
