On 18/6, global spot gold prices closed down nearly 48 USD, reaching 4,208 USD per ounce. The decline continued into the 19/6 session, with prices losing an additional 25 USD, now at 4,185 USD.

Global gold prices reversed decline during the 18/6 trading session. *Chart: Kitco*.

The market faces pressure from a strengthening US dollar and signals of monetary tightening from the US Federal Reserve (Fed). However, the downturn is not severe, as a peace agreement between the US and Iran has pushed crude oil prices lower, alleviating inflation concerns.

"The largest influencing factor is the Fed's tightening stance. This boosts the USD, putting pressure on gold", stated Peter Grant, senior metals strategist at Zaner Metals.

Following its policy meeting on 17/6, the Fed announced it would maintain current interest rates. Nevertheless, nine officials indicated a need for one rate hike this year. The CME FedWatch tracking tool now shows an 85% market probability of a US rate increase in December. This is significantly higher than the 61% forecast before the Fed's meeting.

Gold typically declines in a high-interest rate environment because the precious metal does not yield interest. Prices have been under pressure since the start of the Middle East conflict, as rising fuel costs fueled inflation worries.

On 18/6, the US and Iran disclosed the terms of their peace agreement. However, US President Donald Trump warned of renewed attacks if Iran fails to uphold its commitments.

Global crude oil prices are currently at their lowest since the conflict began. Brent crude is priced at 79 USD per barrel, its lowest since the 2/3 session. Meanwhile, WTI stands at 76 USD per barrel.

Beyond gold, other precious metals also saw declines. Silver prices fell about 3% to 65 USD. Platinum and palladium experienced similar drops.

Ha Thu (according to Reuters, Kitco)