Gold loses momentum again and falls to its lowest level in 3 sessions

Gold prices recorded a strong decline during trading on Wednesday evening, due to the strength of the US dollar, which weakened demand for the precious metal from investors holding other foreign currencies against the dollar.

Data from the ADP private employment sector showed that the US economy added approximately 122,000 new jobs in May, while forecasts had expected a rise in new jobs of about 118,000, after the US economy added the equivalent of 105,000 new jobs in April.

These data have strengthened market bets regarding the recovery of the US labor market amidst rising inflation rates in the United States, which means that the US Federal Reserve may maintain its tightening approach for longer than expected. Consequently, the dollar rose at the expense of gold priced in greenbacks.

On another front, tensions in the Middle East continue to cast a negative shadow on gold price trading today, after disturbances have renewed, threatening diplomatic efforts aimed at reaching a ceasefire agreement between the United States and Iran.

In this context, Kuwaiti authorities and official media reported that Iran launched ballistic missiles towards Kuwait and Bahrain, resulting in one death and dozens injured, while US forces carried out strikes on the Iranian island of Qeshm, accusing Tehran of carrying out new attacks despite the ongoing ceasefire agreement.

With negotiations stalling alongside the continued closure of the Strait of Hormuz and the halt of shipping and navigation, the likelihood of rising global inflation is increasing, supporting a prolonged environment of high interest rates, which negatively affects demand for gold.

Current Gold Prices

Regarding today's trading, spot gold prices fell by about 0.99% to reach $4,444.94 per ounce, the lowest level in the past three sessions, while gold futures contracts for August delivery declined by approximately 1.03% to $4,473.12 per ounce.