Gold sees biggest monthly drop since 2016 | Business and Economy News

As the US Federal Reserve accelerated its policy tightening plans, the price of gold fell below $ 1,800 an ounce.

By Bloomberg

Gold headed for its biggest monthly decline in more than four years after the Federal Reserve accelerated its expected pace of monetary tightening and prices fell below $ 1,800 an ounce.

The rise in US stocks to a new record and a resurgent dollar have also weighed on the precious metal. Investors are also considering new travel restrictions in Europe amid concerns about the coronavirus delta variant, which has helped rethink the reflation trade.

Gold bars are stabilizing as traders now focus on when policymakers could start rolling back incentives while assessing risk sentiment. Fed officials, who met in June, responded to mounting inflation risks by pulling their expected timing and pace of rate hikes forward from current levels near zero and by initiating a discussion on when to stop asset purchases .

“Gold is starting to find support here at the $ 1,775 level,” said John Feeney, business development manager at Sydney-based bullion dealer Guardian Gold Australia. “We are now starting to see investors re-investing in metals at these lower prices as the Fed’s more restrictive shift appears to be priced in.”

Spot gold fell 0.2% to $ 1,775.52 an ounce at 11:34 a.m. in Singapore. Prices are down 6.9% this month, the strongest since November 2016. Silver, palladium and platinum all fell. The Bloomberg Dollar Spot Index rose 1.9% in June and is heading for the largest monthly increase since March 2020.

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