Global gold prices have fallen further. Spot gold fell 0.5 percent Friday, August 28, morning, to $4,576.30 an ounce. Earlier this week, gold had climbed to its highest level in more than three months.
At the current dollar exchange rate, that price works out to roughly 563,000 taka per ounce in Bangladeshi currency. By that calculation, gold costs roughly 18,100 taka per gram and roughly 211,000 taka per bhori (11.664 grams), based on an exchange rate of 122.996 taka to the dollar.
However, this is the international market’s spot price. The final price of gold in Bangladesh’s market may differ somewhat, since taxes, duties, making charges and other costs are added when determining the local price.
Meanwhile, U.S. gold futures fell 0.8 percent to $4,629 an ounce.
Matt Simpson, a senior analyst at StoneX, said Kevin Warsh is more likely than not to adopt a tough, or “hawkish,” policy stance. If that happens, gold prices could fall further in the short term from their recent highs.
However, he believes many investors will view this pullback positively.
That’s because investors who missed the first wave of gold’s price surge may see this as an opportunity to re-enter the market.
At Thursday’s Jackson Hole conference, central bank officials from various countries around the world expressed concern about the U.S. inflation situation.
Data released a day earlier showed the Fed’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) price index, rose 3.7 percent over the 12 months through July.
Fed Chairman Kevin Warsh is due to speak at the conference Friday. Investors are watching closely to see whether his remarks offer any hint about the Fed’s next decision on interest rates.
According to the CME FedWatch tool, the market currently sees a 33.9 percent probability of a U.S. rate hike in September, and a 74 percent probability of one by December.
Gold is generally considered a safe investment against inflation, but its appeal diminishes when interest rates are high, since gold generates no interest or fixed income.
Still, gold prices are getting some support from rising investor participation in exchange-traded funds (ETFs) and futures markets.
OCBC precious metals strategist Christopher Wong, however, believes there remains a risk of further pullback or stabilization in the gold market.