Gold prices fell sharply and lost ground
Gold prices fell sharply, dropping below the psychological threshold of $4,000 per ounce, hitting a new low and posting its worst performance in the last decade. The market is under pressure from expectations of U.S. interest rate hikes and a strengthening dollar, prompting investors to exit the precious metal en masse.
The global gold market continues to decline, recording a drop for the third consecutive day, which has pushed the price below $4,000 per ounce. Amid hawkish signals from the U.S. Federal Reserve and a strengthening dollar, the metal is losing its appeal to investors, who are shifting to higher-yielding assets. According to Bloomberg, the spot price of gold slipped below a key level after falling by about 2% in previous sessions and hit lows not seen since November. Overall, the second quarter was a disaster for gold—down 14%—marking its worst performance since 2013.
Statements by Fed officials intensified pressure on the market. Beth Hammack, President of the Federal Reserve Bank of Cleveland, noted that she does not see sufficient signs of a slowdown in the U.S. economy and suggested the possibility of further rate hikes to achieve the 2% inflation target. Additional signals are expected from Fed officials during international economic events, where investors are trying to gauge how hawkish policy will be going forward. Fed officials have previously hinted that they may support at least one rate hike by the end of the year.
The market reacts to this immediately: rising rates make gold less attractive, as it does not generate interest income. At the same time, the U.S. economy is showing resilience, particularly in the labor market, which further reinforces expectations of tighter monetary policy. The technical picture also does not favor precious metals: the formation of a so-called “death cross”—when short-term moving averages fall below long-term ones—is perceived by investors as a signal of a possible protracted decline. As of this morning, gold was trading near $3,983 per ounce, while silver, platinum, and palladium also continued to lose value.
Analysts note that the situation remains dependent on the Fed’s decisions and the future trajectory of inflation in the U.S. Meanwhile, as the market awaits new interest rate decisions, gold is gradually losing its status as a “safe haven” and entering a phase of heightened volatility, according to Bloomberg.
Global gold prices fell by more than 3%, dropping below the $4,000-per-ounce mark. This is the lowest level for the precious metal since last November.
