According to Reuters, as of 1:40 PM Eastern Time on June 30, spot gold was trading at $4,027.03 per ounce, up 0.3% from the previous session. However, during the day, it fell to as low as $3,943 per ounce, marking its lowest level since November of last year.
Gold futures for August delivery settled at $4,038.50 per ounce on the New York Mercantile Exchange, down 40 cents, remaining in a stable range.
The Wall Street Journal reported that gold futures prices fell 13.4% in the second quarter, the largest quarterly decline since the second quarter of 2013. Silver futures also dropped 20.4% during the same period, marking the biggest decline since the first quarter of 2020.
The primary reason for the drop in gold prices is interest rates. Geopolitical shocks, such as the war in Iran, typically stimulate demand for safe assets. However, this time, concerns that rising oil prices and supply instability could lead to inflationary pressures have had a greater influence.
Markets are reflecting the possibility that the U.S. Federal Reserve may maintain high interest rates for an extended period or consider further hikes. Gold does not yield interest or dividends, so when real interest rates rise, its investment appeal diminishes.
Edward Meyer, an analyst at Marex, stated, "U.S. inflation remains above the Fed's 2% target," adding, "The market believes the Fed may keep high rates longer or consider rate hikes."
Investors are closely watching U.S. employment data set to be released this week. A strong labor market could bolster the Fed's tightening outlook.
* This article has been translated by AI.
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