Gold Reverse Down, Dollar Pressures Again
Gold prices reversed downwards in Monday's trading after strengthening earlier in the session. Pressure came from a recovering US dollar, while investors awaited the Federal Reserve's June meeting minutes, which will be released this week.
At 9:02 a.m. Eastern Time (13:02 GMT), spot gold fell 0.7% to US$4,146.67 per troy ounce. Earlier, it had touched a two-week high of US$4,202.13 per troy ounce. Meanwhile, US gold futures for August delivery rose 0.8% to US$4,157.70 per troy ounce.
The strengthening US dollar was the main factor pressuring gold. When the dollar strengthens, gold becomes more expensive for buyers using other currencies. This condition tends to dampen interest in the precious metal.
Although last week's US employment data was weaker than expected, the pressure on the dollar was not significant. ING analysts believe the weak jobs data hasn't been enough to damage the dollar, as US short-term interest rates have remained at relatively high levels since April.
Market focus is now on the Fed's meeting minutes, which will be released Wednesday. At the June meeting, the US central bank held interest rates steady, but Fed officials' projections still leave open the possibility of a rate hike before the end of 2026 to address inflation risks from the energy sector.
For gold, the prospect of high interest rates remains a major obstacle. Rising interest rates can increase the appeal of interest-bearing assets such as government bonds, while gold offers no yield. Therefore, although gold has strengthened, its upside is still limited by the stronger dollar and the Fed's potentially hawkish stance.
Source: newsmaker.id
