The price of gold has continued the slide of the past few trading days. It fell to its lowest level in almost half a year. In London, the listing for a troy ounce (31.1 grams) slipped to 1889.70 US dollars. The precious metal was last traded so cheaply in March. Around noon, the gold price was again at 1895 dollars.
Market observers explained the latest price pressure with speculation that interest rates in the USA would continue to rise. The minutes of the US Federal Reserve's latest meeting, released on Wednesday evening, showed that the US central bankers are keeping the door open for further interest rate hikes in the fight against inflation. Rising interest rates on the capital markets make gold less attractive.
In addition, the rise in the value of the dollar as a result of speculation on interest rates put selling pressure on the shares. Since gold is traded in dollars on the world market, a strong US currency makes the precious metal more expensive and slows demand.
Banks buy less gold
Dekabank experts also referred to the declining gold purchases by central banks. According to data from the World Gold Council interest group, central bank purchases fell by around 35 percent in the months from April to June compared to the previous quarter. "While their share of total demand was still around a third in the third quarter of 2022, it was recently just over ten percent," said an analysis by Dekabank.
At the beginning of May, the price of gold rose to $2,062, just missing a record high. Analysts at Dekabank are assuming that the price of gold will settle in the region of $1,900 per troy ounce by the end of the year.