Bengaluru – Gold prices slipped on June 30 and were on track for their biggest monthly decline since October 2008, as uncertainty in the Middle East gave way to expectations of US interest rate hikes to tame elevated inflation.
Spot gold was down 0.8 per cent at US$3,985.57 per ounce, as of 0613 GMT, shedding 12.1 per cent so far in June in what could be its fourth consecutive monthly fall. US gold futures for August delivery lost per cent to US$3,999.20.
Bullion was also set for its first quarterly fall since 2024 and the largest since the June quarter of 2013, as the Iran war sent energy prices sharply higher, stoking inflation fears and bets for interest rate hikes.
“You have high inflation, high interest rate expectations, and a strong dollar, and that’s overriding all other bullish factors that are typically associated with a gold rally,” said Edward Meir, an analyst at Marex.
While gold is traditionally seen as a hedge against inflation, it loses its appeal in a high-interest-rate environment.
Traders expect three Federal Reserve rate hikes this year, and are currently pricing in about a 64 per cent chance of a September increase, according to the CME FedWatch Tool.
Investors are now awaiting the US June ADP employment and nonfarm payroll data, both due this week, to further gauge the Fed’s stance on rate hikes.
The US dollar strengthened and was headed for a second monthly gain, making greenback-priced bullion more expensive for holders of other currencies.
Oil prices were on track for their sharpest quarterly decline since 2020 as investors eyed the outcome of Iranian and US talks in Doha this week, even as Iran said no meeting had been scheduled.
“Gold bulls need at least one of three things to improve: lower real yields, a softer USD or a clearer unwind in hawkish Fed expectations. Without that, rallies are likely to be faded and gold may spend more time consolidating below previous highs,” OCBC precious metals strategist Christopher Wong said in a note.
Spot silver fell 1.3 per cent to US$57.53 per ounce, platinum lost 0.7 per cent to US$1,563.25, while palladium gained 0.4 per cent to US$1,218.07. All three metals were headed for quarterly and monthly losses. REUTERS
