Gold prices end lower as US dollar leaps to 3-week peak

Gold prices retreated at settlement today, Aug. 2, as the US dollar climbed to the highest level in three weeks, and after Fitch downgraded its US credit rating.

In an interview with CNBC, Daniel Pavilonis, senior market strategist at RJO Futures, explained that higher interest rates may further pressure on gold prices, which have been recently trading between $2,000-$1,900/ounce.

As chances of a US recession recede and the country’s debt ceiling crisis fades, gold prices may tumble from current levels, especially as the monetary tightening cycle approaches its end, according to HSBC Securities.

On the other hand, in a report issued on Aug. 1, the World Gold Council indicated that the global demand for the yellow metal fell 2% in the second quarter to 920.7 metric tons, with the slowdown in the pace of bullion purchases by central banks.

In terms of trading, bullion for August delivery ticked 0.15% lower, or $3.30, to close at $1,937.40 an ounce.

Meanwhile, the US dollar index, which measures the performance of the US currency against a basket of six major currencies, nudged up by 0.20% to 102.51 points at 08:31 pm Makkah time, touching a three-week high.