Gold prices fell to the lowest level in nearly 6 months as selling pressure still prevailed, although the market began to see bottom-fishing buying around the psychological support level of 4,000 USD/ounce.
Spot gold prices fell 0.63% to 4,084.46 USD/ounce. Meanwhile, gold futures for August delivery in the US fell slightly by 0.2%, to 4,125.10 USD/ounce.
Mr. Matt Simpson - Senior Analyst at StoneX said that the $4,000/ounce zone is playing a notable supporting role for the market.
When the price approaches the $4,000 mark, this is a support zone that easily makes sellers take short-term profits or attract bottom-fishing buying power back," he said.
According to expert StoneX, the USD has not increased sharply after the US inflation data was released earlier, thereby creating conditions for gold to technically recover in the short term if production price index (PPI) data does not cause major surprises.
Investors are currently focusing their attention on the US producer price index (PPI) report released on the same day, after the consumer price index (CPI) in May recorded the strongest increase in more than three years, mainly due to rising energy prices.
According to CME's FedWatch tool, the market currently assesses the possibility of the US Federal Reserve (Fed) raising interest rates before the end of the year at over 70%.
The rebound in oil prices in recent sessions has also increased concerns about inflation. Although gold is often seen as an inflation hedging tool, a high interest rate environment often puts pressure on precious metals because gold does not bring yields.
On other precious metals markets, spot silver prices rose 1.1% to $64.41/ounce. Platinum prices rose 0.8% to $1,671.09/ounce, while palladium rose 2.9% to $1,248.59/ounce.
