Gold prices marginally increased, during trading today, Friday, June 24, 2022, but it is on its way to achieving the second consecutive weekly decline.
This comes with fears that major central banks will implement significant increases in interest rates to contain hyperinflation, which is weighing on the demand for bullion.
Gold prices today
The price of gold futures contracts – August delivery – increased by 0.07%, to reach the level of $ 1823.70 an ounce.
On Thursday, gold prices ended trading down by about $9, with the rise in the US currency, and expectations of more interest rate hikes.
The price of spot delivery of the yellow metal also rose by 0.22%, to reach $1,826.72 an ounce, according to data seen by the specialized energy platform.
In contrast, the price of silver futures contracts – for July delivery – decreased by 0.19%, at $ 20.88 an ounce.
The spot platinum price rose by 0.44%, at $910.83 an ounce, and the spot palladium price rose 1.03%, at $1841.12 an ounce.
Federal Reserve Chairman Jerome Powell told lawmakers that the Fed’s commitment to curbing 40-year high inflation was “unconditional,” even as he acknowledged that sharply higher interest rates could drive up unemployment.
The dollar continues to record strong levels, and expectations are that the Fed will raise interest rates by 75 basis points in July.
The dollar and US bonds
The dollar index fell slightly, making gold priced in US currency less expensive for buyers holding other currencies.
The benchmark 10-year US Treasury yields also fell, which could support gold demand.
Higher interest rates and bond yields increase the opportunity cost of holding bullion, which does not pay any interest.
Demand for gold
“Gold looks weak in the near term, given its inability to break above $1,850,” said Matt Simpson, chief market analyst at City Index.
He added that “were it not for the fear of a global recession, it is likely that gold will be less than it already is,” Reuters reported.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.81% to 1,063.07 tons on Thursday from 1,071.77 tons the day before.