Gold prices continued to decline today

Gold prices declined moderately, reaching a seven-week low, the cause of which is to increase the likelihood of higher interest rates the Fed in the near future. Pressure on the quotes also provides strengthening of the American currency.

Precious metals fell more than 4 percent after it posted last week, minutes of the last Fed meeting revived expectations of further tightening of monetary policy of the Fed, that is, to increase the interest rate. 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. Today futures on interest rates Fed indicate that the probability of a rate hike in June is 38% versus 4% at the beginning of last week, and is estimated at 60% in July.

"US economic data point to a gradual improvement in the situation, which in turn promotes the growth of the US currency, - said Naeem Aslam, chief analyst at Think Forex -. In addition, market participants are increasingly believe that the Fed will increase rates in June."

Today, the dollar reached a two-month high against a basket of currencies on expectations that the Fed will raise rates in the near future. A stronger dollar usually puts pressure on gold, as it reduces the metal's appeal as an alternative asset and increases in the price of dollar-denominated commodities for holders of other currencies. According to analysts, gold may continue to decline to around $ 1,200 an ounce, the lowest level since early February. "This mark will soon be tested for strength," - said in Commerzbank.

In addition, it became known that the gold reserves in the largest gold ETF-fund SPDR Gold Trust fell Tuesday by 3.9 tonnes to 868.66 tonnes. It was the first decline for the month.

The cost of the June gold futures on the COMEX fell to $ 1222.2 per ounce.