2023-08-22 12:23:53
gold bar
The gold price weakens due to ambiguous signals from the US Federal Reserve.
(Photo: dpa)
Frankfurt August has not been a good month for the price of gold so far. The precious metal is on a downward trend, even falling to just under $1,884 per troy ounce at the end of last week, its lowest level since mid-March. The price has since recovered, but is still trading below $1,900.
As long as the market is divided on whether and when the US Federal Reserve will ease its tight monetary policy, price weakness could continue. There are several reasons for this.
1. Gold suffers from high interest rates
Gold does not generate current income. In an environment of high interest rates, investors who want to invest their money safely are opting for government bonds rather than gold. And their interest rates have risen sharply: The yield on the ten-year US government bond was around 4.3 percent, which is almost as high as it has been for 15 years.
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