Gold prices went south this week hitting the $2,150 level. The precious metal could slip further if the commodity markets fail to recover this week. The XAU/USD chart shows gold prices falling by nearly 4 points and dipping by close to 0.20%. This week has been harder for commodity investors as both gold and oil prices remained in the red.
Also Read: US Dollar Trounces Gold & Other Local Currencies
Brent Crude is down by 0.88 points leading it to slump more than 1%, as its price fell to $86.48 on Wednesday. In addition, crude oil dipped 1.14% losing its value by 0.94 points and falling to $81.76. Therefore, commodities like gold and oil are printing losses this week making investors lose money.
So why are gold prices falling? In this article, we will highlight why gold and commodities like oil and gas are dipping in price.
Also Read: Goldman Sachs Predicts the Future of the Cryptocurrency Market
Why Are Gold Prices Falling?
Gold prices are falling as the US dollar is strengthening ahead of the FOMC meeting today. The US dollar DXY Index skyrocketed to 104.10 on Wednesday hours before the Federal Reserve’s meeting on Wednesday. The dollar trampled gold, oil, and other leading commodities to come out on top of the financial chain this week.
Also Read: Saudi Arabia: Non-Oil Revenue Hits 50% of GDP for the First Time
The decline in gold prices is attributed to the Federal Reserve maintaining its stance of a prolonged high-interest rate. Subsequently, the development has boosted US Treasury bond yields and put the dollar on a pedestal.
“This decline is attributed to the robust inflation figures emanating from the United States last week, which have fueled expectations that the Federal Reserve will maintain a stance of prolonged high-interest rates,” said Arslan Butt, the Lead Commodities and Indices Analyst at FX Leaders.
Also Read: Currency: What’s Happening With the US Dollar and Indian Rupee?
Apart from gold, the US dollar also trounced local currencies like the Indian Rupee on Wednesday. The US dollar rallied in 24 hours making the Rupee depreciate to 83.18.
