Gold prices plummet further this Monday morning in anticipation of the Federal Reserve’s Monetary Policy decision on Wednesday.
Gold prices had been rising on a wave of economic uncertainty and investor risk aversion post the UK’s decision to leave the European Union. Prices hit a high of 1,367.3 USD/ounce on the 6th of July.
Since then prices have however started to decline again and hit a new three-week low at 1,319.9 USD/ounce in market trading early Monday morning, which is 0.45% down from market open.
The new decline in gold prices has been prompted by expectations of a likely rise in US interest rates in the coming months. Fed Funds Futures showed a 15% likelihood for the Fed to decide on an interest rate increase by September and a 38.5 % likelihood of a rate increase by December.
The outcome of Wednesday’s Fed meeting may prompt further movements in the price of gold if there are suggestions that the Fed is ready to act sooner than the market is currently pricing in.
At 13.39pm gold was trading at 1,317.04 USD/ounce.
