Gold prices fell during these moments of trading today, Monday, with the rise of the dollar, although investors largely bet that the US Federal Reserve was close to ending the cycle of raising interest rates that began since last year.
Everyone is waiting for the Fed's decision, which is the most important event that moves global markets and writes the future of trading and trends for gold and the dollar
Gold and the dollar now
Gold futures fell 0.32% to $1,958 an ounce.
While spot contracts fell by 0.05% to 1954 dollars an ounce.
On the other hand, the dollar index rose by 0.05% to 99,650 points.
gold last week
Gold prices stabilized on Friday, as investors assessed hawkish statements by the Federal Reserve, and in conjunction with growing consumer confidence in the United States.
Upon settlement, gold futures for August delivery settled at $1964.4 an ounce, after touching $1954.7 during the session, but it recorded a weekly gain of 1.65%.
Is gold going down?
The dollar has rallied after hitting lows in April 2022, making gold more expensive for holders of other currencies.
Matt Simpson, chief market analyst at City Index, said: The pause in gold's rallies after the CPI was breathtaking, and that leaves the possibility of a technical pullback to the $1940-$1950 region.
Data in the US last week hinted at a slowing pace of inflation, as consumer prices grew at their slowest pace in more than two years.
Simpson added: While inflation remains high, markets respond to relative changes in the absolute level of future interest rates. And if the peak is near, that's another supportive feature for gold, along with central bank purchases.
Interest rate increases are expected from the Federal Reserve and the European Central Bank next week, and the markets are of the opinion that the US central bank will likely stop raising interest rates before making cuts next year, while another increase is expected in Europe.
Lower interest rates reduce the opportunity cost of holding non-yielding bullion.
Consumer Confidence and Fed Statements
University of Michigan data revealed that the consumer confidence index rose by 12.7% on a monthly basis, at 72.6 points in the preliminary reading for July, which is more than expectations for an increase to 65.5 points.
While inflation expectations for the coming year rose slightly to 3.4% in July from 3.3% in June, long-term inflation expectations were stable, remaining within the narrow range of 2.9% and 3.1%.
Christopher Waller, a member of the Federal Reserve, said that he prefers to raise interest rates this year, confirming what was stated in the minutes of the Federal Open Market Committee meeting during the month of June.
Markets currently favor around a 96% chance of a 25bps rate hike at the upcoming July meeting, with expectations growing between 58% and 83% to stabilize the monetary policy range thereafter, at 5.25% and 5.50% for the remaining three meetings this year.
Chinese economy
China's economy, the largest consumer of gold, grew at a subdued pace in the second quarter - up 0.8% compared to an expansion of 2.2% in the first quarter - with markets expecting the authorities to launch more stimulus to support growth.
Hong Kong's stock exchange halted trading due to the approach of Typhoon Telem, while Japan's Nikkei closed for a holiday, although futures were down 0.3%.
