FX.co ★ Gold Drops to 1-Month Low

Gold fell below $4,550 per ounce on Wednesday, its lowest level in a month, pressured by rising energy prices and expectations of a more hawkish stance from major central banks. Oil and gas prices climbed further at the turn of the month after US President Trump ruled out an imminent deal with Iran in the absence of an agreement on its nuclear program, prolonging the suspension of energy exports from the Middle East. Elevated energy costs have already prompted some FOMC members to dissent from the Fed’s easing bias in its latest policy decision, in which interest rates were left unchanged. Higher rates typically diminish the appeal of non-yielding assets such as bullion, weighing on demand for precious metals. The Bank of Japan also struck a hawkish tone at its recent meeting, while the ECB and the Bank of England are set to announce their own rate decisions tomorrow.