August gold futures fell to their lowest since November as traders anticipate Fed rate increases to combat rising inflation.
August gold futures dropped to $4,046.20 on Thursday, marking a six-month low. The decline extends a 6.3% weekly loss, the steepest since mid-March, when gold fell 9.62%.
Gold’s sensitivity to real interest rates has weighed on prices as inflation concerns grow. U.S. consumer inflation rose at its fastest pace in three years in May, driven by energy costs. Strong jobs data has also fueled expectations of a Fed rate hike later this year.
The Federal Reserve is expected to hold rates steady at 3.50%-3.75% next week during Kevin Warsh’s first meeting as chair. However, economists in a Reuters poll anticipate future tightening to curb inflation.