Gold prices fall in global markets

Gold prices have fallen in the international market on fears that the US Federal Reserve, the central bank, may increase interest rates further. At the same time, inflation concerns have increased as crude oil prices have exceeded $100, which has put pressure on the gold market.

Spot gold prices fell 0.2 percent to $4,37.29 per ounce at 2:02 am Bangladesh time on Friday (July 24). The price of gold had fallen about 2 percent the previous day. It is now down more than $130 per ounce compared to Wednesday's two-week high.

US gold futures for August delivery also fell 0.3 percent to $4,39.80 per ounce. However, gold prices are still up about 0.5 percent throughout the week.

Brian Lan, Managing Director of GoldSilver Central, said that volatility in the gold market may continue in the short term. He said that for several weeks, the price of gold has fluctuated between $3,980 and $4,170 per ounce. Big buyers become active in the market whenever the price drops near or below $4,000.

Meanwhile, US President Donald Trump on Thursday threatened a "major military response" against Iran and the Houthi group it supports. Earlier, Yemen's Houthis attacked two Saudi oil tankers in the Red Sea.

After this incident, the price of Brent crude oil in the international market rose by about 7 percent in a day to exceed $100 per barrel, which is the first time since May. This is one of the biggest jumps in oil prices since the war began.

According to analysts, high oil prices can increase inflationary pressures and as a result, central banks can maintain high interest rates for a long time. Although gold is generally considered a safe investment against inflation, its attractiveness as an interest-free asset decreases in a high-interest environment.

Investors are now looking ahead to the Federal Reserve's policy meeting next week. The market expects interest rates to remain unchanged this time. However, according to the CME FedWatch tool, the probability of a rate hike in September is about 81 percent.

On the other hand, the European Central Bank (ECB) left interest rates unchanged as expected on Thursday, but left the possibility of another rate hike in September open.

Meanwhile, among other precious metals, spot silver prices rose 1 percent to $57.76 per ounce and are on track to gain about 3.4 percent for the week. On the other hand, platinum prices fell 1 percent to $1,583.91 per ounce and palladium prices fell 1.7 percent to $1,236.16. Both metals have been on a downward trend for the week.

Source: Reuters