Downward pressure on gold price falling
The price of gold today continued to decline robustly, dropping by 15 USD to 1,939 USD/ounce. This fall was attributed to the rebounding Treasury yields in the last session. Traders speculate that the US Federal Reserve (Fed) will maintain their current interest rates after observing the slowdown in US consumer price growth for May.
The US consumer price index (CPI) increased by 4.0% in May, which is the smallest annual increase in over two years. However, it still remains significantly higher than the Fed's target of 2%. Despite gold being viewed as a hedge against inflation, non-yielding assets are often affected by higher interest rates, making them less appealing.
As we move towards the end of summer, interest rates are expected to remain high. This results in the appreciation of the USD, creating downward pressure on gold.
The US consumer price index (CPI) increased by 4.0% in May, which is the smallest annual increase in over two years. However, it still remains significantly higher than the Fed's target of 2%. Despite gold being viewed as a hedge against inflation, non-yielding assets are often affected by higher interest rates, making them less appealing.
As we move towards the end of summer, interest rates are expected to remain high. This results in the appreciation of the USD, creating downward pressure on gold.
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