Gold prices experienced a decline recently as concerns over higher U.S. interest rates intensified ahead of central bank meetings. The decline in gold prices was influenced by the anticipation of a more hawkish outlook on rates from the Federal Reserve, with expectations of steady rates and even discussions of possible rate hikes.
This shift in sentiment towards higher interest rates poses challenges for gold as it increases the opportunity cost of investing in the precious metal. Additionally, factors such as waning safe-haven demand and a stronger U.S. dollar further contributed to the pressure on gold prices amidst the backdrop of upcoming central bank meetings.
Citations:
[1] https://www.investing.com/news/commodities-news/gold-prices-fall-as-rate-jitters-mount-ahead-of-fed-meeting-3405566
[2] https://www.reuters.com/markets/commodities/gold-prices-drift-lower-hawkish-fed-minutes-2024-05-23/
[3] https://www.fxstreet.com/news/gold-pulls-back-after-touching-a-new-all-time-high-202405211012
[4] https://www.cnbc.com/2024/04/30/gold-prices-ease-as-dollar-firms-ahead-of-fed-policy-meet.html
[5] https://www.bloomberg.com/news/articles/2024-04-30/gold-set-to-gain-for-third-straight-month-ahead-of-fed-meeting