Gold prices experienced slight declines on Wednesday within narrow trading ranges, as the Juneteenth holiday in the U.S. subdued market activity.
As of 07:30 ET (11:30 GMT), spot gold dipped 0.1% to $2,328.84 per ounce, while gold futures also fell 0.2% to $2,343.20 per ounce.
Gold’s recent retreat follows the Federal Reserve’s announcement of revised interest rate expectations, reducing earlier projections of three rate cuts to just one in 2024. This policy shift has bolstered the U.S. dollar, making commodities priced in dollars, including gold, relatively more expensive for foreign buyers. It has also increased the opportunity cost of holding non-yielding assets.
In May, gold surged to nearly $2,450 per ounce, driven by strong central bank demand amid concerns over geopolitical tensions and persistent inflation. Central banks purchased a significant amount of gold last year, marking the second-highest volume ever at 1,037 tons. The trend continued into 2022, setting a new record with 1,082 tons of gold purchased.
Looking ahead, the World Gold Council’s annual survey of 70 central bankers revealed that 29% of respondents plan to increase their gold reserves over the next 12 months, the highest level since the survey began in 2018.
In parallel trading, other precious metals also traded within tight ranges on Wednesday. Platinum futures rose 0.8% to $984.75 per ounce, while silver futures edged up 0.1% to $29.598 per ounce.
