Gold prices fell in the European market on Thursday, continuing their losses for the fourth day in a row, on the verge of touching the lowest level in three months recorded in the previous session, due to the continuation of global central banks in raising interest rates in the battle to control high inflation.

The Swiss National Bank announced a short while ago that it raised Swiss interest rates to the highest level in 15 years, and the Bank of England announces later today a new increase in British interest rates, and Federal Reserve Chairman Jerome Powell indicated the continuation of raising US interest rates during The next period during his testimony before the US Congress

Gold prices today

Gold metal prices decreased by 0.3% to $1,927.15, from the opening level of trading at $1,932.82, and recorded the highest level at $1,935.02.

On Wednesday, gold prices lost about 0.2%, the third daily loss in a row, and recorded the lowest level in three months at $ 1,919.18 an ounce, in light of Jerome Powell’s testimony before the US Congress.

global interest

The Swiss National Bank raised interest rates today, Thursday, by about 25 basis points, in line with market expectations, bringing the Swiss interest rate range to 1.75%, the highest level since 2008, when the global financial crisis erupted.

The Bank of England is expected to announce shortly that it will raise British interest rates by 25 basis points, the 13th in a row, raising the range to 4.75%, the highest level since 2008.

Last week, the European Central Bank announced a new increase in European interest rates by about 25 basis points, to a range of 4.0%, the highest level since 2008.

As we know that high global interest rates negatively affect the attractiveness of gold bullion, because it increases the opportunity cost of keeping the non-returnable metal.

Jerome Powell

Federal Reserve Chairman Jerome Powell said on Wednesday before the House Services Committee in Washington, D.C., that two more interest rate hikes this year is a very good guess because the central bank's goal is to bring the inflation rate down to its 2% target.

The inflation rate remains well above the Fed's target of 2%, Powell said, and Powell stressed that the Fed still has more work to do.

Powell added, inflation has eased somewhat since the middle of last year, however inflation pressures continue to rise, and the process of bringing inflation back to target still has a long way to go.

Jerome Powell's testimony on the Semi-Annual Monetary Policy Report is scheduled to be completed today at 14:00 GMT before the Senate Banking Committee in Washington, DC.

Markets had used a lot of aggressive expectations ahead of Powell's testimony, so his comments didn't contain major surprises, said Carol Kong, currency analyst at Commonwealth Bank of Australia. year.

American interest

Following Powell's comments, futures pricing for the possibility of raising US interest rates decreased by 25 basis points during the next July 26 meeting from 77% to 72% currently, and futures pricing for the possibility of keeping US interest rates unchanged from 23%. % to 28%.

predictions

Kitco senior analyst Jim Wyckoff said that there is not one major component that is pressuring the gold market, but rather a combination of rising yields and technical selling pressure.

Wyckoff added that if Jerome Powell was more pessimistic about future US economic growth prospects or hesitant about raising interest rates in the future, this could lead to a weakening of the dollar index, which in turn helps gold.

Commodities analyst at TD Securities Daniel Ghaly said gold prices are falling due to the broad-based selling activity observed across silver, platinum and palladium, despite the dollar's weakness.

SPDR Box

Gold holdings of the SPDR Gold Trust, the largest global index fund backed by gold, fell yesterday by about 1.73 metric tons, bringing the total to 932.3 metric tons, which is the lowest level in nearly a week.