Gold prices fell in the European market on Wednesday, deepening their losses for the second consecutive day. The metal dropped below the $3,300 per ounce level, hitting its lowest point in a week, under pressure from rising U.S. dollar levels in the foreign exchange market.
Markets are awaiting the release of the latest Federal Reserve meeting minutes later today, which are expected to offer strong clues regarding the likelihood of U.S. interest rate cuts in the second half of the year.
The Price
Gold prices declined by 0.5% to $3,284.51, marking the lowest level since June 30, down from the session’s opening at $3,301.83. The intraday high was recorded at $3,308.02.
On Tuesday, gold settled down by 1.05% as safe-haven demand for the metal weakened.
U.S. Dollar
The dollar index rose by more than 0.2% on Wednesday, resuming gains that had paused briefly in the previous session. The index is nearing a two-week high of 97.84, reflecting broad strength in the U.S. currency against a basket of major and minor currencies.
President Donald Trump stated on social media that there would be announcements on Wednesday concerning “at least seven trade-related countries,” without providing further details.
He also threatened to impose a 50% tariff on imported copper and said he would soon enact long-standing tariff threats on semiconductors and pharmaceuticals.
According to European sources cited by Reuters, the European Union is unlikely to receive a tariff letter and may be granted exemptions from the standard U.S. tariff rate of 10%.
U.S. Interest Rates
According to the CME FedWatch tool, the probability of a 25 basis point rate cut at the July meeting is currently priced at 5%, while the probability of maintaining current rates stands at 95%.
For the September meeting, markets are pricing in a 62% chance of a 25 basis point rate cut and a 38% chance of no change.
To reassess these probabilities, investors are closely monitoring the release of the Fed’s latest meeting minutes due later today.
Gold Outlook
Market strategist Ilya Spivak commented that gold has held up remarkably well this month despite rising yields and a strong U.S. dollar. Its ability to withstand pressure points to underlying strength and a bullish bias.
Spivak added that while this is a data-light week, the market’s response to the June FOMC meeting minutes may play a key role in shaping sentiment in the ongoing policy debate between the Fed and the markets.
SPDR Gold Trust Holdings
Holdings in the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell by approximately 1.15 metric tons on Tuesday. The total now stands at 946.51 metric tons, marking the lowest level since June 17.
