Gold Price Stalls at 2-Week High...Temporary Retreat Due to Strong Dollar?

▲ Gold, Dollar (USD)/AI generated image

Gold prices slipped from a two-week high due to a strong dollar, but JPMorgan maintained its forecast for a rebound to $4,500 per ounce in the fourth quarter. Market attention is now turning to the minutes of the U.S. Federal Reserve (Fed) meeting, which will provide clues on the direction of interest rates.

According to BeinCrypto, a cryptocurrency media outlet, on July 7 (local time), spot gold prices fell by 0.58% to $4,141.26 per ounce. The dollar rose by 0.3% ahead of Tuesday, July 7. The strong dollar increased the burden of gold purchases for overseas investors, reversing some of last week's declines.

Jim Wyckoff, a market analyst at American Gold Exchange, stated, “The U.S. dollar index is slightly higher today, which is a daily bearish factor for gold.” However, the decline in gold prices was limited as June's employment growth showed a clear slowdown. Previous employment figures were also revised downwards.

Weak employment indicators reduced the likelihood of a short-term interest rate hike. The CME FedWatch Tool reflects about a 56% chance of an interest rate hike in September. Investors are awaiting clues on the direction of interest rates from the Fed minutes to be released on Wednesday.

JPMorgan lowered its fourth-quarter gold price forecast by about 25% this month. Previously, on June 9, it had expected gold prices to reach $6,000 per ounce by year-end. JPMorgan cited weakened demand in key buying sectors as the reason for the downward revision. It also warned that downside risks could increase if summer inflation data comes out strong.

JPMorgan maintained its bullish outlook for precious metals in the long term. It predicted that gold prices would extend their upward trend until 2027, driven by continued central bank purchases. Silver prices were forecast to average $60-65 per ounce, with platinum showing a steady rise and palladium prices weakening until 2027.

[Article Summary]

-Spot gold prices fell by 0.58% to $4,141.26 per ounce amidst a strong dollar.

-JPMorgan lowered its Q4 gold price forecast by about 25% but maintained its projection for a rebound to $4,500 per ounce.

-JPMorgan predicted that the upward trend in gold prices would continue until 2027, based on central bank purchases.

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