Gold prices fell for the second straight quarter after losses that began in August and continued through September, underscored by this week's decline - the worst in more than two years.

Gold prices now

The most actively traded COMEX gold contract for December settled at $1,866.10 an ounce, down $12.50, or 0.7%, on the day. The reference for US gold contracts was down by 4% during the week, which is its largest weekly decline since a decline of nearly 6% during the week until June 11, 2021.

For the third quarter, the decline in the price of gold on the New York Stock Exchange (COMEX) was about 3%, after declines of 2% in August and 5% in September, compared to a rise of 4% in July. In the second quarter, gold contracts fell approximately 4%.

The spot gold price, which some traders track more closely than gold futures, was at $1,850.20 by 14:00 ET (18:00 GMT), compared with the previous session's settlement price of $1,864.56. A week ago, the spot gold price was $1,924.99. At the end of June, it was at $1,919.57.

American data and the most important gold movements

More importantly, in September, gold lost its position at the key positive level of $1,900 per ounce that the yellow metal had held since mid-August. This came after some investors found the dollar - the main opponent - to be a better safe haven as the growth of the US economy remained relatively better than the rest of the world.

US GDP grew 2.1% year over year in the second quarter, after 2.2% growth in the first quarter. GDP is expected to increase by 2.1% during the whole of 2023. In contrast, the eurozone economy is expected to grow by only 0.7% this year.

But more than all of that, gold was negatively affected by the selling in US Treasuries that pushed the dollar higher while investors followed their yields.

Bond yields, measured by the average yield on 10-year U.S. Treasuries, settled nearly 4.58 below the digital on Friday after reaching a 16-year high of nearly 4.69 on Thursday.

Gold is under pressure...and the dollar is rising strongly

He said: Gold is under great pressure here despite the calm in the bond market as investors rejoin stocks. Real yields are not going to ease any time soon and this continues to put pressure on gold.

The dollar index remained stubborn around 106 - adding pressure on gold - after hitting a 10-month high on Wednesday.

The dollar continued to rise despite the latest inflation data that raised hopes that the Federal Reserve may extend its continued hike in interest rates at its November meeting. The Personal Consumption Expenditure (PCE), a price index closely tracked by the Federal Reserve, rose 0.4% last month, close to Wall Street's expectations for a 0.5% increase.

The Federal Reserve left interest rates unchanged at its last meeting on September 20, after adding half a point in July. It has raised interest rates 11 times since March 2022, adding a total of 5.25 points relative to the previous base rate that peaked at 0.25%. While the central bank stopped raising rates this month, it maintained expectations that a quarter-point increase could occur at any of its two remaining meetings this year, scheduled for November and December.

Gold was also unable to benefit from the demand for a safe place from the upcoming US government shutdown after Republicans in Congress delayed funding public agencies.

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