Gold prices have fallen on the international market amid inflationary pressure and fears of a possible interest rate hike by the U.S. central bank, the Federal Reserve.
At 12:10 p.m. Bangladesh time on Friday, spot gold fell 0.8 percent to $4,182.47 an ounce. With this, gold is on track for a drop of about 3.4 percent over the week. U.S. gold futures for August delivery, however, rose 2.2 percent to $4,203.60 an ounce.
On Thursday, gold fell to its lowest level in more than six months before recovering somewhat to close trading at $4,219.69. This was driven in part by U.S. President Donald Trump’s signal that he had canceled a planned military strike against Iran and that a peace agreement could come soon.
Edward Meir, an analyst at the market research firm Marex, said the gold market is currently being driven entirely by news of the geopolitical situation.
In his words: “The market will now be watching for any message from the Fed. If they signal a rate hike, gold prices could fall below $4,000.”
Gold prices have fallen about 20 percent since the Iran war began. Investors fear that rising energy prices could push up inflation. As a result, the world’s central banks could be forced to keep interest rates high for a long time. That reduces the appeal of holding gold as a non-yielding asset.
Meanwhile, the producer price index in the United States rose more than expected in May. The rising cost of energy due to the Middle East conflict is thought to be the main reason. As a result, annual price growth reached its highest level in three and a half years.
According to data from CME Group’s FedWatch tool, the market currently puts the probability of a Fed rate hike in December at about 60 percent.
President Donald Trump, on the other hand, said Thursday that the United States and Iran could sign a peace agreement this weekend, which would restore normal ship movement through the Strait of Hormuz. Iran, however, has said no final decision has yet been made on any agreement.
Gold holdings at the New York-based SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, also fell. On Wednesday, the fund’s gold holdings fell about 0.3 percent to 923.89 metric tonnes.
Taking market volatility into account, ANZ Bank cut its year-end gold price target by $400 to $5,200.
Among other precious metals, silver fell 0.9 percent to $66.78 an ounce. Platinum rose 0.4 percent to $1,725.99 but remained on track for a loss over the week. Palladium, meanwhile, rose 1.7 percent to $1,290.15 an ounce and gained about 5 percent over the week.
বাংলায় মূল প্রতিবেদন পড়ুন · Read the original Bengali report