Gold concludes 8th straight session lower, experiences worst 6-year losing streak.

gold price down

Gold (Xauusd) chart from tradingview.com

Gold prices dropped for the eighth time in a row on Wednesday, reaching their lowest levels since July 6. This happened because U.S. Treasury yields were higher and the U.S. dollar was strong, putting pressure on gold.

Reasons for the price change

Gold prices fell for eight days in a row because the interest rate on the 10-year U.S. Treasury note went up. This interest rate is the highest it’s been since 2008, which affected gold prices.

During a meeting in July, important officials from the Federal Reserve (the central bank of the U.S.) said they might need to make monetary policy tighter to control inflation. They think there’s a big chance that inflation could rise even more.

On Wednesday, the interest rates for the 10-year and 2-year Treasury notes were higher. The 10-year one went up by 3 basis points to 4.25%, and the 2-year one went up by 2 basis points to 4.97%.

Rising prices for crude oil and the U.S. economy growing faster than expected made people worried that inflation might go up again. If this happens, the Federal Reserve and other important banks might have to keep increasing interest rates. This could make the price of gold go down.

Marios Hadjikyriacos, who is a senior investment analyst, said that gold has been losing value this month. This is because the interest rates for loans are going up, and the U.S. dollar is getting stronger. Gold is not as attractive in this situation.

The U.S. Dollar Index, which measures how strong the U.S. dollar is compared to other currencies, went up by 0.1% on Wednesday to 103.30.

In economic news from the U.S., the government said that housing construction increased by 3.9% in July compared to the previous month. Because there aren’t many existing homes for sale, more people are thinking about buying newly built homes. This has led to more construction of new homes.

The Federal Reserve also reported that industrial production in the U.S. went up by 1% in July. This increase was mainly because the production of cars and car parts went up by 5.2%.

1 Comment

Leave a Reply

Your email address will not be published. Required fields are marked *