Gold falls on expectations that Fed will stick to rate hikes

Gold prices fell today, Friday, as markets view strong US economic data as an impetus for the Federal Reserve (the US central bank) to keep interest rates high for a longer period, but caution before inflation data and the Monetary Policy Committee meeting next week limited gold’s decline. ‏

According to Reuters, spot gold fell 0.2 percent to $1,926.09 an ounce by 0944 GMT, but it moved in a relatively narrow range after falling nearly 1 percent in the previous session following US data.

US gold futures fell 0.1 percent to $1,927.30

Michael Hewson, chief market analyst at CMC Markets, said that the US gross domestic product figures “raise speculation that the Federal Reserve will raise interest rates for a longer period, although inflation is starting to look more moderate,” which pressures on gold.

Data released on Thursday showed that the US economy grew faster than expected, but most economists expect a recession by the second half of the year that will be mild and short-lived compared to previous recessions due to an unusually strong labor market.

The dollar index stabilized to a large extent, which made gold denominated in the US currency less attractive

Investors are looking forward to the US Central Bank’s Monetary Policy Committee meeting next week, which will last for two days, and expect an increase in interest rates by 25 basis points.

As for other precious metals, silver fell in spot transactions by 0.7 percent, to $23.72 an ounce.

Platinum fell 0.9 percent to $1,009.38, and palladium lost 0.5 percent, to $1,668.69.