Gold slides on higher dollar, amid doubts about stopping ‎interest rates

Gold prices fell today, Friday, with the dollar rising to its highest level in more than a week, after positive data for the weekly jobs report in the United States renewed uncertainty about whether the Federal Reserve (the US central bank) would stop raising interest rates after an expected increase next week.

By 0937 GMT, spot gold fell 0.4 percent to $ 1962.09 an ounce, but it is heading for a 0.4 percent increase this week.

According to “Reuters”, US gold futures contracts also fell 0.3 percent to $ 1964.20 an ounce.

The Fed is widely expected to raise interest rates by 25 basis points on July 26. Expectations that this would be the last increase pushed gold to its highest levels in about two months on Thursday, heading for gains for the third week in a row.

“If the Federal Reserve confirms market expectations and stops raising interest rates after this month, this may help gold buyers regain the $2,000 threshold,” said Han Tan, senior market analyst at Exinity.

He added, “But if the Federal Reserve bucks the notion that the cycle of raising interest rates is coming to an end, that could push gold to give up some of its recent gains and return again to the mid-threshold of $1,900.”

The dollar index hit its highest level since July 12 after a sudden drop in weekly claims for unemployment benefits in the United States boosted bets that the Federal Reserve would continue to raise interest rates for longer.

The rise in the dollar affects gold because it makes it more expensive for buyers who hold other currencies, and raising interest rates negatively affects the yellow metal because it increases bond returns, which raises the opportunity cost of owning it while it does not yield a return.

Among other precious metals, silver fell in spot transactions by 0.1 percent to $ 24.71 an ounce, while platinum rose 0.2 percent to $ 955.68 an ounce, and palladium rose 0.4 percent to $ 1283.10 an ounce.