Since its all-time high of $2,450 per ounce reached on May 20, the price of gold has fallen by more than 4.20%. This decline has been influenced by comments from the Federal Reserve (Fed) indicating a longer path towards the 2% inflation target.
Higher interest rates increase the cost of holding gold, an asset that does not generate interest. According to the CME FedWatch, rate cuts in November are a 59% probability, subject to upcoming economic data, especially inflation-related ones.
Two senior Fed officials, Raphael Bostic and Neel Kashkari, have highlighted the persistence of inflationary pressures. Their statements reinforce the expectation that the Fed will maintain a vigilant and prudent stance, influencing investors' perceptions of gold's future value.
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