Gold falls to lowest close in 11 sessions after shedding over 2%

Gold alloys

Gold prices deepened their losses at settlement today, May 23, after US monetary policy makers expressed a more stringent tone at the last Federal Reserve meeting, indicating concerns about inflationary pressures.

Bullion for June delivery plummeted by 2.35%, or $55.7, to end at $2,337.20 per ounce, the lowest since the close of the May 8 session ($2,322.3/ounce).

Meanwhile, the US dollar index, which gauges the greenback's strength against a basket of six currencies, increased 0.1% to 105.06 points at 09:13 pm Makkah time, hitting the highest level since May 14, when it touched 105.46 points.

This came as UBS raised its gold price forecast to $2,600 per ounce by the end of the year. It also recommended buying at around $2,300 or less, citing a series of weak US data for April and central bank demand amid the ongoing geopolitical woes, as per Reuters.

The CME FedWatch Tool showed that chances for the Fed to stabilize borrowing rates in the June and July meetings stood at 98.9% and 88.9%, respectively. Further, investors’ preference for reducing interest rates by 25 basis points in the September meeting declined to 46.4%, from 50.7% a week ago.