Gold tumbled down to its lowest price in about 4 month in the international market amidst strengthening dollar price and optimism over corporate tax cuts in the United States. Gold price declined to $1,251.68 per ounce, its lowest price since last July. This drop also comes amidst a time when cryptocurrencies across the world including Bitcoin are touching record rates in the market.
Overall, gold has lost about 2.3% of its value this week. This is considered to be gold’s worst weekly performance in July. Another factor to be considered here is that the US labour report and the monetary policy of US Federal Reserve are all set to be released next week. It is expected that Fed will increase interest rates this month. Most industry experts predict that this move will bring down gold price even further.
A strong demand for dollar in the market also lowered the price of gold. Dollar price for Thursday touched a two-week high amidst optimism over the upcoming Republican tax package. Another major factor that contributed to the price decline of gold is the performance of stock markets. Gains witnessed in the stock market discouraged buyers from opting for gold.
The recent bitcoin fever is also blamed for the drop in gold price. In the last two weeks, bitcoin has more than doubled in value across various exchanges and it is currently trading at a price above $16,000. This is considered to be a new milestone for cryptocurrencies, which are now considered to be a safer alternative than gold.
In addition to gold, other precious metals also suffered losses in the commodities market. The price of silver declined 1.1% to $15.79 an ounce, which is close to its lowest price in four months. The price of platinum lowered 1.2% to $890.74 an ounce.