Gold prices are witnessing ups and downs during these moments, as they reached their lowest level in a week, today, Wednesday, coinciding with the dollar remaining near the highest level in 6 months amid expectations that interest rates are likely to remain high.

Federal Reserve Governor Christopher Waller said yesterday, Tuesday, that the latest round of economic data will give the central bank some time when it decides whether additional increases in interest rates are needed to control inflation or not.

Gold at settlement yesterday

Gold futures prices fell at the end of trading yesterday, Tuesday, as markets evaluated hawkish statements from monetary policy makers at the Federal Reserve, and amid a rise in the dollar index.

Yellow metal futures for December delivery fell by 0.75%, or $14.5, to $1,952.6 per ounce.

Federal Reserve statements and return to the dollar

The US dollar remained near six-month highs hit on Tuesday, while 10-year bond yields were at one-week highs, capping gold's gains. The rise in the dollar makes gold expensive for holders of other currencies.

Federal Reserve Governor Christopher Waller said the latest round of economic data gives the US central bank some time to see if it needs to raise interest rates again.

Waller added in an interview on CNBC: There is nothing that says we need to do anything imminently anytime soon, indicating that he supports keeping interest rates steady at the next meeting of the central bank. “We can just stay at these levels and wait for more data,” he said.

Waller noted that raising interest rates again, if necessary, would not cause significant damage to the labor market, noting that the current increase in bond market yields is consistent with the Fed's actions.

While Loretta Mester, head of the Federal Reserve in Cleveland, said during an interview with the German newspaper Bursen Zeitung: I can imagine from what I see so far, that we may have to raise the interest rate a little, and there is still a lot of data before we make our next decision in September.

Edward Moya, a market analyst at OANDA, believes that increasing market fears about the slowdown in global economic growth and the possibility of a deepening crisis are pushing many investors to return to holding the dollar again, according to what was reported by CNBC.

“Fed members’ comments on monetary policy making on a meeting-by-meeting basis kept bets on further tightening in November/December alive,” said Yap Jun Rong, market analyst at IG.

In addition, the jump in oil prices does not provide much reassurance to global inflation expectations and further convinces investors to see higher interest rates for longer, Runge said. Adding that next week's US Consumer Price Index data will determine the federal interest rate expectations in the coming months.

Higher US interest rates and Treasury yields raise the opportunity cost of holding gold, which yields no benefit from holding it.

A batch of surveys showed on Tuesday that global trade activity slowed considerably last month, stimulating demand for the safe-haven US dollar rather than gold.

The SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.1% on Tuesday.

other metals

Spot silver settled at $23.53 per ounce, platinum fell 0.3% to $923.16, while palladium rose 0.1% to $1,213.46.