Gold prices are falling with the rise of the US dollar

Gold prices fell during trading today, Thursday, May 26, 2022, with the rise of the US dollar.

The decline comes with the support of the signals shown by the US Federal Reserve policy meeting; The US central bank is likely to continue on its path of raising interest rates.

Gold Prices Today

The price of gold futures contracts for August delivery decreased by 0.44%, to reach the level of $ 1844.10 an ounce.

Gold prices ended their trading, yesterday, Wednesday, with a decline of more than 19 dollars, to record the largest daily losses in two weeks, with the rise of the US currency.

The price of spot delivery of the yellow metal also decreased by 0.36%, to reach $ 1846.56 an ounce.

At the same time, the price of silver futures contracts – July delivery – decreased by 0.79%, at $21.79 an ounce.

The spot platinum price decreased by 1%, at $935.27 an ounce, and the spot palladium price declined 0.61%, at $1980.87 an ounce.

Interest Rates

Goldsilver Central’s managing director, Brian Lane, said the Fed’s commitment to raise interest rates has weighed on gold a bit.

He pointed to profit taking from some dealers in the market, expecting prices to drop to $1,820 or so.

Gold pared some losses driven by the dollar, on Wednesday, after notes from the May meeting of the Federal Reserve indicated that the US central bank will not get any stronger, and will raise interest rates again by 50 basis points in June and July to combat inflation.

Recession Crisis

“In the long run, investors who know a recession is looming are looking for something of a high value that can kill them during that time, and gold will shine,” Lan said.

Interest rates and US short-term bond yields raise the opportunity cost of holding bullion, which yields nothing, however, gold is seen as a safe asset during financial crises.

Gold Holdings

Tiger Brokers chief strategist Michael McCarthy said it was a positive for gold for the Fed to raise two more points by half a percentage point, and then wait to see its economic impact; So gold’s response has been disappointing.

On the other hand, holdings of SPDR Gold Trust, the world’s largest gold-backed trading fund, rose 0.2% to 1,069.81 tons, on Wednesday, from 1,068.07 tons the previous day.