Quotes of gold fell today, approaching to almost two-week low. The pressure on the precious metal has a stronger dollar and increased risk appetite.
It is worth emphasizing, gold prices declined for five of the last six sessions, however, they are still 19 percent higher than at the beginning of the year, as expectations the US Federal Reserve to increase interest rates weakened. Low interest rates support the price of gold, which does not bring interest income to investors. The increase in rates, in turn, would contribute to the growth of the dollar and have reduced the demand for gold.
“Drivers who have raised the price of gold continues to remain largely unchanged, including fluctuating Fed forecasts on terms of the rate increase and decrease of the US dollar”, – said Nitesh Shah, an analyst at ETF Securities.
Analysts at the same time note that the limiting factor for the growth of gold prices are expectations of Fed rate at the next meeting, which will lead to the strengthening of the US currency. According to the quotations of futures on a bet the Fed, traders estimate the probability of a June rate hike to 4%.
A slight effect on the gold had data for China. National Bureau of Statistics of China reported that the results of April the consumer price index rose by 2.3% per annum, as well as in March. The experts predicted an increase of 2.4%. The index is still below the inflation target of 3% this year, and the central bank have further room for easing monetary policy against the backdrop of the ongoing economic slowdown. Compared with the previous month, the consumer price index fell by 0.2% after falling in March to 0.4% in April. In addition, it was announced that the producer price index in April fell by 3.4% per year, after declining by 4.3% in March. The fall of the index observed over four years. Economists had forecast the index decline 3.8%.
The cost of the June gold futures on the COMEX fell to $ 1262.5 per ounce.
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