Gold prices are continuing to drop rapidly


Gold prices are continuing to drop rapidly
Gold prices are continuing to drop rapidly

Gold prices are continuing to drop rapidly

Gold prices are suffering a sharp decline and are on track for the steepest drop in two years.

Gold prices fell further on Tuesday as the expected rise in US interest rates helped the dollar against gold, especially following recent inflation data. This is leading to the biggest monthly drop for gold in almost two years, with prices falling to their lowest level in two months.

Consumer spending in the United States rose by 1.8% last month, the biggest increase since March 2021, while the personal consumption expenditures price index (the Federal Reserve's preferred measure of inflation) increased by 0.6%, following a 0.2% rise in December.

What is the price of gold today?

Gold prices dropped 0.53% to $1807.09 an ounce, their lowest level in two months, while US gold futures declined 0.56% to $1,813.30.

Statements made by members of the federation.

Philip Jefferson, a Governor of the Federal Reserve, stated on Monday that he is sure inflation will go back to the 2% target set by the Fed soon.

Yesterday, Jefferson, a member of the US Federal Reserve, declared that the labor market is currently very strong and in high demand. In order for sustainable economic progress to continue, it is essential to return to the 2% inflation target.

The Federal Reserve wants to reduce inflation and is willing to take whatever steps necessary to achieve its goal. However, it might be difficult and take some time for inflation levels to get back down to 2%.

Boston Fed Chair Susan Collins said on Friday that inflation rates remain very high and recent data, such as strong labor market indicators, higher-than-expected retail sales and producer price inflation, further supports her view. To address this issue, more actions need to be taken in order to bring inflation down to the desired 2% target.

The Federal Reserve's target interest rate is predicted to reach a high of 5.403% in September.

What is the amount of the interest increase?

The Federal Reserve's decision to raise rates depends largely on the US data and whether the current downward trend continues. According to OCBC FX strategist Christopher Wong, this will determine how much the Fed will increase.

The U.S. dollar's momentum could be reduced if the Federal Reserve stops increasing interest rates, which would help to boost gold prices. According to Wong, this is likely to happen.

Harish V., the head of commodity research at Geojit Financial Services, believes that rising consumer spending and strong jobs numbers will give the Federal Reserve the confidence to raise interest rates to address inflation.

The price of gold has dropped 6% this month, after reaching its highest level in 10 months earlier in the month.

Recent economic reports have indicated the US economy is doing well, leading many Federal Reserve officials to believe that interest rates should be increased in order to control inflation.

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