World gold prices fell in the afternoon trading session of July 16 as the market continued to assess the monetary policy outlook of the US Federal Reserve (Fed) after a series of new inflation data, while monitoring the developments of energy prices.
As of 2:35 PM Vietnam time, spot gold prices fell 0.58% to 4,024.19 USD/ounce. Gold futures contracts for August delivery in the US fell 0.56% to 4,029.10 USD/ounce.
This development occurred after the US announced lower-than-expected June inflation figures. The core producer price index (PPI) released on July 15 showed that price pressure continued to cool down, following the previous consumer price index (CPI) report. However, the market remains cautious about the possibility of energy prices rising again, which could affect inflation prospects in the near future.
According to the CME FedWatch tool, investors are currently still valuing about 73% of the Fed's ability to raise interest rates at the December meeting.
In his latest statements, Fed Chairman Kevin Warsh reaffirmed the goal of bringing inflation to 2%, and said that interest rates are still one of the tools to control inflation. However, he did not give a clear signal on when to adjust policies and emphasized that the Fed will continue to assess economic data.
Meanwhile, Fed Governor Lisa Cook said she is "ready to act" if inflation does not soon continue to cool down. On the contrary, New York Fed Chairman John Williams said that the current interest rate level is still consistent with the goal of bringing inflation back to 2%.
The market is also waiting for today's speeches by Fed Chairman Dallas Lorie Logan and Fed Vice Chairman Philip Jefferson to find more signals about monetary policy prospects.
According to Li Xing Gan, strategist at Exness, the technical outlook for gold prices is still quite fragile. If gold prices fall below the psychological threshold of 4,000 USD/ounce, selling pressure may increase and the market is likely to retreat to the bottoms set in June.
In other precious metals, spot silver prices fell 1.72% to 56.79 USD/ounce. Platinum and palladium prices also simultaneously fell in the trading session. Meanwhile, the Bloomberg Dollar Spot Index remained almost flat after falling 0.3% in the previous session.
