Gold price is set to end the month of June with a decline of about 3.8%, its biggest since November 2016. Gold hit a low of $1245.3/oz this month, the lowest level since Dec.2017.
Gold’s fall was triggered by gains in US dollar and weaker investor interest. The US dollar index has surged about 1.2% in June and is set to end its third monthly gain. The US dollar has benefitted from optimism about US economy and Fed’s rate hike expectations. Fed has indicated two more rate hikes this year.
While US dollar index is near 1-year high, the gains will be challenged by concerns about economic impact of US led global trade war. Federal Reserve Bank of St. Louis President James Bullard said worries over escalating trade disputes are weighing increasingly on businesses across his district.
ETF outflows also show weaker investor interest. Gold holdings with SPDR ET F fell by 26.5 tonnes to 820.5 tonnes in June. Holdings last month hit the lowest level since August 2017.