Gold prices dip, still above $1,700

Gold prices fell today, July 20, under pressure from the expected tightening of monetary policy by central banks, as markets await the European Central Bank (ECB) and Federal Reserve’s meetings tomorrow and next week, respectively.

Gold futures for August delivery dipped 0.35% to $1,704.80 an ounce at 09:54 am Makkah time, trading near an 11-month low, with spot prices plunging by 0.24% to $1,707.39 per ounce.

Elsewhere, silver futures for September delivery also declined 0.15% to $18.68 an ounce. The spot price of platinum, meanwhile, jumped 0.52% to $878.99, with the spot price of palladium also up 0.37% to $1,882.99.

The main dollar index, which measures the performance of the US currency against a basket of six currencies, saw a marginal drop of 0.13% to 106.82 points.

Markets are anticipating a 25-basis-point (bp) rate hike from the ECB, offset by a 75- to 100-bp increase from the Fed, which will challenge demand for the zero-yielding precious metal bullion.

In a statement to America’s National Public Radio (NPR) on Tuesday, US Treasury Secretary Janet Yellen indicated that inflation weighs heavily on American families. However, she stressed the strength of the US economy and its ability to fend off a recession, explaining that the central bank’s goal is to combat inflation without reversing economic growth.