Gold prices hit five-week low after US interest rate hike

Gold prices fell during trading today, Tuesday, recording their lowest level in five weeks, and these losses come due to the increasing expectations that the Reserve Bank will raise interest rates for the third time in a row, in addition to the increased risk appetite among investors in the markets, which is evident in the rise in global stocks.

gold prices

gold prices

At exactly 10:40 GMT, gold prices traded at $1246.10 an ounce from the opening price of the trading session at $1243.84, and the highest price per ounce was recorded at $1247.67, while the lowest price was recorded at $1242.90, the lowest in seven weeks.

Gold prices closed their trading on Monday, recording a loss of 0.8% for the fourth consecutive day, due to statements made by senior officials at the Federal Reserve.

Yesterday, the President of the Reserve Bank of New York, “William Dudley”, stated that it is not appropriate not to raise interest rates, because this would harm the US economy, and stressed the continuation of the labor sector in its strength and positive direction, which will improve inflation rates that have temporarily declined during the last period.

For his part, the President of the Reserve Bank of Chicago, Charles Evans, said that the current conditions are favorable for the implementation of the cycle of raising interest rates and reducing the balance sheet of the board in a gradual and slow manner.

These statements raised expectations that the Federal Reserve would proceed with its tightening policy and raise interest rates for the third time in a row this year.

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It is expected that Vice President of the Reserve Bank, “Stanley Fisher” will make his statements later today, and a number of members of the Reserve Bank will speak at different times this week.

On the other hand, Japanese stocks achieved a sharp rise for the third consecutive day, recording their highest levels in two years, and European stocks continued to rise, while futures contracts for the Standard & Poor's 500 Index rose before the opening of the session, and the index jumped to its highest levels ever.

Gold holdings owned by the “SPDR Gold Trust” fund, one of the largest global gold-backed funds, settled at their levels unchanged for the second day in a row, bringing the total holdings at 853.68 metric tons, the lowest since June 5.

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Mohamed Abdel Khaleq

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