The gold price is under further pressure today as investors exit the haven asset on the back of easing political tensions and expected monetary policy tightening from the US Federal reserve.
The US dollar seems to be the favorite choice at the moment as traders seek interest bearing investments and a stronger dollar makes it more expensive for holders of other currencies to buy gold.
The precious metal has now lost over $30 in the last 3 trading sessions as tensions between North Korea and the US subside, which for now seems to have brushed off the situation that a military conflict was imminent.
Gold also once again showed how sensitive it was to interest rate hikes from the Fed and after last week’s statement by the central bank that the central bank was still on target to raise rates it fell out of favour.
The correction is going to continue because the Fed seems bent on continuing their scheduled rate hikes,” said George Gero, managing director with RBC Wealth Management.
Yesterday’s durable goods order figure from the US hit the market at 1.7 percent against analysts’ expectations for a figure of 1 percent and all but guarantees that the fed will lift rates over the coming months, and with this expectation, we may see the gold price suffer further losses.