Gold prices fall from two-week high due to stronger USD

Gold prices today have fallen from a two-week high. This price was achieved after Federal Reserve Chairman Jerome Powell commented to reinforce expectations of interest rate cuts.

At 9:14 GMT (4:10 p.m. Vietnam time), spot gold fell 0.3% to $3,362.56/ounce, after hitting its highest level since August 11 on Friday. December gold futures on COMEX fell 0.3% to $3,407.30 an ounce.

USD Index increased by 0.2%, making gold more expensive for holders of other currencies.

Fed Chairman Jerome Powell signaled last Friday the possibility of a rate cut at the Fed's September meeting, saying that risks to the job market are increasing, while inflation is still a threat, while emphasizing that the decision has not been "backed".

UBS analyst Giovanni Staunovo commented: In my opinion, Mr. Powell only suggested a 25 basis point cut in September. Therefore, the market is adjusting expectations, which has supported the USD and put pressure on gold prices.

Currently, the market is pricing in an 87% chance that the Fed will cut interest rates by 0.25 percentage points at its September meeting, down slightly from nearly 90% after Powell's speech on Friday.

According to CME's FedWatch tool, investors also predict that the total cut will reach 48 basis points by the end of this year.

S stronger cuts also depend on upcoming US economic data, which needs to show clear signs of weakness. We expect gold to reach $3,700/ounce by mid-2026, Staunovo added.

Investors are now waiting for the US personal consumption expenditure (PCE) data released on Friday, which is expected to show core inflation increasing to its highest level since the end of 2023, reaching 2.9%.

Gold is often rising in a low-interest-rate environment due to the reduced opportunity cost of holding non-yielding assets.

In other precious metals, spot silver fell 0.2% to $18.75 an ounce, platinum fell 0.9% to $1,349.35 an ounce, and palladium fell 0.7% to $1,118.26 an ounce.