Gold prices dropped significantly

Gold has fallen in price by almost 1.5 per cent, reaching a four-week low, as the recent "hawkish" comments from the Federal Reserve sent the dollar to a two-month high against a basket of major currencies

The prospect of further interest rate rises, as signaled minutes of the last Fed meeting, and the strengthening of the dollar has fallen off the price of gold by more than 4 percent in May, which is the largest monthly decline since November 2015. Recall, higher interest rates have a downward pressure on the price of gold, which brings its holders to interest income and that is difficult to compete with the assets, bringing that income against the background of increasing interest rates.

Yesterday Philadelphia Fed President Patrick Harker said that this year, the Fed may raise interest rates two or three times, and the next increase is already possible at the June meeting. Two other presidents of the regional Federal Reserve banks yesterday also made similar comments. Today futures on interest rates Fed indicate that the probability of a rate hike in June is 30% versus 4% at the beginning of last week.

"The US dollar was on the rise and the gold is under pressure We have already overcome the level of $ 1250, which played a good support If the fall continues, the next target will be the psychological mark of $ 1,200..", - Said an analyst at Societe Generale Robin Bhar.

The pressure on gold also had positive data on the US housing market. The Commerce Department reported that in April, sales of new single-family homes rose to a maximum of more than eight years, and prices have reached record highs / According to the data, new home sales jumped 16.6 percent to a seasonally adjusted annual rate reached 619 000 units, the highest level since January 2008. The percentage increase was the largest since January 1992. Sales in March were revised up to 531,000 units from the previously reported 511,000 units. Economists had forecast that sales of new buildings, which accounted for about 10.2 percent of the housing market, reached only 523,000 units last month. The report came after a fairly upbeat data on housing sales in the secondary market and housing construction. He also added factors to the retail sales report and industrial production, suggesting that the economy is gaining momentum after growth almost stalled in the first quarter.

In addition, it became known that the gold reserves in the largest gold ETF-fund SPDR Gold Trust rose on Monday by 0.38 percent, to 872.52 tonnes

The cost of the June gold futures on the COMEX fell to $ 1235.3 per ounce.