Gold Price Dips for Second Day in a Row

Tuesday, 15-June-2021 10:03

illustration: gold bars
Image : Wikimedia
illustration: gold bars

CHICAGO, NETRALNEWS.COM - Gold price has dipped again in late trading on Monday (Tuesday 06/15/2021 am Indonesian Western Time), extending losses for a second straight day as some investors fear the US Federal Reserve (The Fed) could outline a path to easing its expansionary monetary policy in a two-day meeting this week.

The most active gold contract for August delivery on the Comex division of the New York Exchange fell by US $13.7 or 0.73 percent, to close at $1,865.90 per ounce. Last weekend on Friday (06/11/2021), gold futures sank by $16.8 or 0.89 percent to touch $1,879.60 an ounce.

Gold futures price edged up by $0.9 or 0.05 percent to $1,896.40 on Thursday (06/10/2021)​​, after increasing $1.1 or 0.06 percent to $1,895.50 an ounce on Wednesday (06/09/2021), and slumped by $4.4 or 0.23 percent to $1,894.40 per ounce on Tuesday (06/08/2021).

Phillip Streible, chief market strategist at Blue Line Futures in Chicago, said there could be some gold liquidation ahead of the Fed's policy meeting which starts on Tuesday.

"There is a possibility that the Fed may indicate that they will start tapering (reduced bond purchases), which will weigh on gold," Streible said.

The Fed is already in the process of "removing" liquidity from the system, and that will also weigh on gold, he added, referring to a pullback spike in the Federal Reserve's repurchase volumes last week.

In addition, the markets will also scrutinize the Federal Reserve's evolving view on unemployment, inflation and economic growth, as well as the possible date for the first rate hike.

"We see the risk of further weakening of prices as (The Fed) tapering talk weakens interest in the yellow metal at a time when flows are not very supportive," TD Securities analysts said in a note. Speculators reduced their net long positions on COMEX gold futures in the week ended that June 8th.

However, Commerzbank expects inflation concerns will push gold to $2,000 an ounce by year-end, adding that inflation could remain at very high levels into the third quarter, prompting the Fed to reduce bond purchases around the fourth quarter.

However, "this does not mean an early rate hike," supporting gold prices, the bank said in a note.

Meanwhile, the price of silver for July delivery fell by $10.7 cents or 0.38 percent to close at $28.039 per ounce. Platinum for July delivery rose by $14.2 dollars or 1.23 percent to close at $1165.30 dollars an ounce, as reported by Antara.

Reporter : turkhan
Editor : turkhan