Gold prices are down

Gold prices declined moderately by updating the 3.5-week low. Pressure on prices has had a stronger dollar and increasing the likelihood that the Fed will raise interest rates in June.

Precious metals began to fall in price after the Fed last week published the minutes of its April meeting, which showed that the US economy may be ready to increase interest rates next month. 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. Since the beginning of the year gold has risen in price by almost 18% due to the reduction of the dollar, an increase in demand for safe-haven assets and the Fed signals that interest rates this year will be increased gradually.

"Minutes of the Fed meeting were clearly more hawkish than expected, and this has led to some changes in the mood now increased the likelihood that the Fed will raise interest rates in June or July.", - Says the analyst of ABN Amro Georgette Boele. Meanwhile, today the president of the Federal Reserve Bank of St. Louis James Bullard said he sees more factors in favor of the slow rate hikes, which in favor of the absence of further tightening of monetary policy. Meanwhile, the president of the Federal Reserve Bank of San Francisco John Williams said he expects two or three short-term increases in interest rates by the central bank this year. Williams added that rate hikes will depend on the exact timing of the data. Today futures on interest rates Fed indicate that the probability of a rate hike in June is 26% versus 4% at the beginning of last week. In addition, traders increased the estimate of the probability of a July rate hike to 53%

"Despite the fact that most traders do not believe the Fed will raise rates in June, investors are trying to reduce risks from open positions in anticipation of the next meeting", - said analyst Bob Haberkorn RJO Futures.

In addition, it became known that the gold reserves in the largest gold ETF-fund SPDR Gold Trust rose on Friday to 1 percent, to 869.26 tonnes, the highest level since November 2013.

The cost of the June gold futures on the COMEX fell to $ 1248.8 per ounce.