Gold Price Expected to Continue Falling
Earlier in the week the price of gold hit a two month low, prices were ranging from $1,274.9 to $1,292.0 per troy ounce. This downwards trend continued on Thursday with prices falling further by 1.02% to trade at $1,280.10.The low was the result of investors pricing in the possibility of an earlier rate hike than expected after the minutes from the Federal Reserve’s July meeting were released. If interest rates are increased sooner than expected then assets which don’t produce interest, such as gold, may lose appeal.
The minutes also resulted in a strengthening of the dollar against other foreign currencies, the USDIX index rose to 11 month highs against a variety of major currencies and this had a knock-on effect on the price of gold.
A number of US economic gauges are due to be posted in the coming days, if they show positive readings, which would further confirm the US economic recovery, then the dollar would receive another boost which would apply more pressure on gold.
On the other hand, if the violence in the Ukraine and the Middle East continues then investors may seek safety in gold.