New York gold futures closed down $38.30, or 0.94%, at $4,038.70 per ounce, the lowest level in one week, pressured by a stronger U.S. dollar trading near a one-month high. Investors held back ahead of the Federal Reserve's monetary policy meeting outcome and a press conference by Fed Chair Kevin Warsh, seeking signals on the interest rate outlook. Analysts noted that persistently high energy prices are fueling inflation concerns, and expectations that the Fed may signal a more hawkish policy stance have boosted both bond yields and the dollar, reducing the appeal of gold, a non-yielding asset. Gold prices have fallen about 24% since the war between the U.S. and Israel against Iran erupted in late February, as markets worry the conflict will push energy prices and inflation higher, potentially keeping interest rates elevated for longer. Investors are pricing in about a 71% chance the Fed will hold rates steady at its July 29 meeting, and about a 75% chance of a rate hike at the September meeting, while closely watching Warsh's remarks. Additionally, investors await the release of the U.S. personal consumption expenditures price index for June on Thursday, July 30, a key inflation gauge for the Fed. Commerzbank cut its year-end gold price forecast by $300 to $4,500 per ounce, saying that if the interest rate trend remains unchanged, gold ETF investors are likely to return only cautiously, making a sustained gold price recovery difficult. On the geopolitical front, President Donald Trump said the U.S. and Iran are engaged in positive negotiations and there is still a chance to reach a deal. However, the U.S. is ready to resume military action if talks fail, while Iran has signaled it will retaliate if attacked again.
Commerzbank AGCommerzbank cut its year-end gold price forecast by $300 to $4,500 per ounce, reflecting a bearish view on gold.