On Thursday, August gold futures dropped to $4,046.20, marking a 6.3% decline for the week and the lowest price since November. This downturn is attributed to fears that persistent inflation, exacerbated by the ongoing Iran conflict, may compel the Federal Reserve to raise interest rates by year-end.
The Fed is expected to maintain its current rate of 3.50% to 3.75% during Kevin Warsh's first meeting as chair, although traders are pricing in a 67% chance of a rate hike by December. The technical outlook for gold appears weak, having recently fallen below its 200-day moving average, a signal noted by Citigroup.
While Citi remains cautiously optimistic about a long-term rebound, JPMorgan expresses concern over declining interest in gold investments, citing outflows from gold ETFs and a retreat from the 'debasement trade' as investors reassess their positions amidst inflation and geopolitical uncertainties