Gold prices fell to a one-month low

 

Interest rate hikes by central banks and a strong US dollar weigh on the price of gold

Gold prices fell to a one-month low

The gold price will continue to be weighed down by the prospect of a significant rise in key interest rates. On Monday, the price of a troy ounce (31.1 grams) fell to 1,720 US dollars (1,719 euros) on the commodities exchange in London. This is the lowest level in about a month. Compared to Friday, the losses were around $15, since Thursday the price has fallen by more than $60.

The main trigger for the discounts is monetary policy: Many central banks, above all the US Federal Reserve, are currently vehemently fighting the sharp rise in consumer prices. On Friday, Fed Chair Jerome Powell gave top priority to fighting inflation. Over the weekend, several representatives of the European Central Bank (ECB) announced a significant interest rate hike for the September meeting.

As a rule, rising interest rates are bad for the price of gold. This is because one disadvantage of the interest-free gold investment comes more to the fore. In contrast, fixed-income securities such as government bonds become more attractive with higher interest rates. Another argument against gold is the strong US dollar, which makes gold traded in the US currency appear less lucrative for many investors due to the exchange rate.