Gold prices drop about $3, during trading today, Wednesday, July 6, 2022, but it remained near the lowest level in 7 months.
This comes as the dollar rose to its highest level in two decades, as investors continued to neglect the yellow metal and look to the greenback, in search of safety amid growing concern over the deteriorating outlook for the global economy.
Gold Prices Today
The price of gold futures contracts for August delivery decreased by 0.18%, equivalent to $3.10, to reach the level of $1762.30 an ounce.
Gold prices ended their trading Tuesday with a decline of about $38, with the strength of the US currency, and despite fears of a global recession.
The price of silver futures contracts – September delivery – rose 0.46% at $ 19.27 an ounce, according to data seen by the specialized energy platform.
On the other hand, the spot platinum price increased by 0.41%, to record $866.56 an ounce, and the spot palladium price rose 0.1%, at $1935.95 an ounce.
Gold Market Forecast
After falling through the $1,790-1,800 support on Tuesday, gold may head lower in the medium term, chief strategist at Tiger Brokers Michael McCarthy said.
He added that the dual effect of the dollar’s rise due to higher rates, and higher rates that have a direct impact on bullion, weighs on gold expectations.
Asian stocks fell and the dollar took hold against the euro on Wednesday, as investor fears deepened that the continent was leading the world into recession.
The dollar index consolidated near its highest levels since 2002, levels that sent gold priced in the US currency down as much as 2.6% on Tuesday.
Technical analyst Wang Tao said spot gold could test support at $1,756 an ounce, and a breakout could lead to a drop to $1,748.
In the meantime, the US Federal Reserve will reveal some decisions from its June policy meeting later in the day, which could give investors a clearer picture of the roadmap for interest rates.
Reuters calculations showed that more central banks raised interest rates in June than in any other month for at least two decades, and with inflation at multi-decade highs, policy tightening is unlikely to abate this year.
Higher rates and US Treasury yields increase the opportunity cost of holding gold, which produces nothing.