Gold Falls, Rally Begins to Halt
Gold prices weakened on Monday (July 6th) after previously recording their first weekly gain since May. The precious metal fell as the market began to adjust its position, even though expectations of a Federal Reserve interest rate hike were easing.
Gold briefly fell as much as 1% to around US$4,137 per troy ounce. Last week, gold managed to rise more than 2% and break a four-week downward trend. However, this gain began to stall as some market participants took profits.
At 10:51 a.m. London time, spot gold fell 0.8% to US$4,142.38 per troy ounce. Silver weakened 0.8%, while platinum and palladium moved relatively stable. Meanwhile, the Bloomberg Dollar Index rose 0.2% after falling 0.3% last week.
Gold's main sentiment was still influenced by weaker US employment data and falling oil prices. These two factors led investors to reduce expectations that the Fed would raise interest rates again in the near future. The swap market now estimates the chance of an interest rate hike at the Fed's July meeting at around 25%.
Weakening oil prices have also eased inflation concerns. Oil prices fell as more tankers passed through the Strait of Hormuz and OPEC+ signaled they would increase crude supply. This has eased inflationary pressures from the energy sector.
However, the market is still monitoring other inflationary risks, such as price pressures from artificial intelligence (AI)-based investments and weather-related supply disruptions. Furthermore, the strengthening US dollar has put pressure on gold, making the precious metal more expensive for buyers using other currencies.
Source: Newsmaker.id
