Silver, platinum, palladium see declines Precious metals dip

In recent financial markets, gold prices have experienced notable fluctuations driven by expectations surrounding US Federal Reserve policy decisions.

Last week, a buoyant equities market and profit-taking activities among investors contributed to a more than one per cent drop in gold prices after a previous surge, Caliber.Az reports citing the foreign media.

Analysts are closely monitoring signals from the Fed, with markets currently predicting a high likelihood of interest rate cuts starting as early as September. As these dynamics unfold, attention is also focused on upcoming economic data releases and statements from Federal Reserve officials, which could further influence gold and other precious metals markets in the coming days.

Gold prices dropped by over one per cent on July 8 due to a surge in equity markets and profit-taking by investors following a sharp increase in the previous session driven by expectations of a rate cut by the US Federal Reserve in September. Spot gold declined 1.5 per cent to $2,354.59 per ounce after reaching its highest level since May 22. US gold futures also fell 1.5 per cent to $2,362.70.

Bob Haberkorn, senior market strategist at RJO Futures, attributed the decline to profit-taking and the strong performance of equities. He noted, "This looks like a lot of profit-taking, and the equities are strong this morning here, which kind of has a little bit of a competing factor with precious metals."

Despite the current dip, Haberkorn expressed optimism about future gold prices, saying, "However, I believe you’ll see gold higher based off the prediction that the Fed is going to be cutting rates. The Fed watch tool saw rate cuts coming in September and then another cut possibly in November and December that will be bullish for gold."

Last week's data indicating a weakening labor market is reinforcing expectations that the US Federal Reserve will soon commence interest rate cuts. Currently, markets are pricing in a 71 per cent probability of a rate cut by the Fed in September, with another cut anticipated in December.

Kyle Rodda, a financial market analyst at Capital.com, highlighted the potential impact on gold, stating, "If we get another downside surprise in inflation data, which we have seen pretty consistently in US data, then that’s going to be a tailwind for gold."

Investor focus this week will be on Federal Reserve Chair Jerome Powell’s semi-annual Congressional testimony, comments from various Fed officials, and US inflation data scheduled for release.

Meanwhile, China's central bank did not add to its gold reserves for the second consecutive month in June. In the precious metals market, spot silver declined by 1.8 per cent to $30.64 per ounce, platinum fell by 2.5 per cent to $1,001.60, and palladium dipped two per cent to $1,005.98.