Gold prices fell in the trading session on June 23 as the USD maintained its strength thanks to expectations that the US Federal Reserve (Fed) will raise interest rates this year, while investors continued to assess the progress of negotiations between the US and Iran.
As of 10:46 am Vietnam time, spot gold prices fell 0.12% to 4,138.02 USD/ounce, after losing nearly 1% in one point during the session. Meanwhile, gold futures for August delivery in the US fell 1.09%, to 4,156.65 USD/ounce.
Mr. Tim Waterer – Market Analysis Director at KCM Trade – said that gold once received certain support from the decline of oil prices in the first sessions of the week, but this factor is currently being overwhelmed by the USD.
Gold prices have received some support from the falling oil prices this week, but the USD has not brought about the same when it continues to rise thanks to expectations that the Fed will raise interest rates," he said.
The USD is currently still maintaining near its one-year high set last weekend, making gold more expensive for investors holding other currencies.
Meanwhile, oil prices recovered after a sharp decline in the first session of the week.
High energy prices continue to increase concerns about inflation and strengthen expectations that interest rates will remain high for a longer time. Although gold is often seen as an inflation hedging tool, this precious metal is gradually losing its appeal in a high interest rate environment due to not generating profits.
In terms of geopolitics, the US has temporarily waived sanctions against Iran for 60 days from June 23, after the first round of negotiations within the framework of a new peace agreement was established.
Officials also said that the fighting situation in Lebanon continues to maintain a state of calmness in response to efforts to end the conflict in the region.
US Vice President JD Vance said that the talks between US and Iranian officials in Switzerland have created a positive foundation for a final peace agreement. However, Iran denied information that it has begun discussions on its nuclear program.
In another development, Chairman of the Chicago Fed Austan Goolsbee said that the US labor market is still stable. According to him, it is important at this time to determine whether high inflation will continue or cool down when the impact of reduced tariffs and tensions in the Middle East are resolved.
According to the CME FedWatch tool, the market currently assesses the probability of the Fed raising interest rates in December to 88%, a sharp increase compared to 61% before last week's policy meeting.
Investors are currently waiting for US Personal Consumption Price Index (PCE) data to be released later this week. This is an inflation measure specifically monitored by the Fed and may provide further signals about the monetary policy roadmap in the near future.
On other precious metals markets, spot silver prices fell 2.95% to 63.17 USD/ounce. Platinum prices fell 1.87% to 1,651.80 USD/ounce, while palladium fell 0.7% to 1,256.27 USD/ounce.
