Gold prices fell on Tuesday as the precious metal continued to adjust after a recent sharp rise and the market awaited US data and comments from Federal Reserve officials for more clues on the path of interest rates.
Spot gold lost 0.3% and stood at $2,311.4 per ounce at 0942 GMT.
Non-yielding bullion is down 6% from an all-time high of $2,449.89 per ounce hit on May 20 amid a rally that came against traditional headwinds such as a strong dollar and high interest rates.
“The quarter ahead is probably where gold will take a pause before rallying again. Gold had risen quite a bit in April-May and is now going through a bit of a reality check,” said Nitesh Shah, Commodity Strategist at WisdomTree.
“Once we start seeing rate cuts gold will start going up again,” Shah said. He forecasts a gold price of $2,570 in June 2025, subject to cooling inflation and other factors.
As for crucial categories of gold demand, the pause taken by the Chinese central bank on gold purchases in May continued to weigh on the market.
However, an annual survey of central banks by the World Gold Council (WGC) found its highest percentage of respondents saying they expected their gold reserves to increase within 12 months.
“The survey indicates that central banks are willing to continue buying,” Shah said.
Meanwhile, physically-backed global gold exchange-traded funds (ETFs), another crucial demand category, failed to string together three consecutive weeks of net inflows, with $294 million of net outflows last week, according to the WGC.
Spot silver fell 1.1% to $29.18, pressured by lower gold and copper prices. However, Shah expects the metal to gain support in the coming months from this year’s deepening structural deficit in the market, amid growth in solar panel usage.
Platinum rose 0.4% to $968.23 as it continued to regain some of the ground lost in May by gold and silver. Palladium lost 1.0% to $879.35.
