Gold prices fell during today’s trading as concerns over global inflationary pressures increased, driven by higher energy prices and stronger expectations that U.S. monetary policy will remain in a tight range for longer.
Spot gold declined 0.8% to $4,501.54 per ounce, while U.S. gold futures fell 1.3% to $4,532.22 per ounce.
The losses in the precious metal came alongside rising oil prices, which strengthened concerns that inflationary pressures on the global economy could persist. This also raised questions about the ability of major central banks to move ahead with interest rate cuts in the coming period.
Market bets increased on the possibility that the Federal Reserve may delay any new monetary easing, as investors continue to assess the impact of higher energy costs on price levels and economic activity.
Gold also faced additional pressure from a stronger U.S. dollar index, as a rise in the American currency increases the cost of buying the yellow metal for investors holding other currencies.
The appeal of gold also weakened as interest rate expectations rose, since the precious metal does not provide regular income to investors, making it less competitive compared with yield generating assets in a tight monetary environment.
Traders in global markets are now awaiting a series of upcoming U.S. economic data releases, along with remarks from Federal Reserve officials, for clearer signals on the path of inflation and interest rates over the coming months.
Among other precious metals, silver prices rose 0.5% to $75.69 per ounce, while platinum advanced 1.1% to $1,940.95 per ounce.
Copper prices also posted slight gains, supported by expectations of continued industrial demand. Benchmark contracts on the London Metal Exchange rose 0.3% to $13,663.33 per ton, while U.S. copper contracts increased by the same percentage to $6.44 per pound.
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