The price of gold declined slightly, retreating from a two-week high. The main reason for the correction was the strengthening of the US dollar. By the end of the trading session, the spot price of the precious metal fell by 0.58%, to $4,141.26 per troy ounce.
Experts at the investment bank JPMorgan, despite a recent revision of their own targets, still expect prices to rise to the $4,500 level in the final quarter of the year. Previously, the company's analysts assumed that by the end of December, exchange prices could test the $6,000 per ounce mark. Thus, the target figure has decreased by about a quarter.
Dollar rally forces gold to retreat
By Tuesday morning, July 7, the dollar had gained 0.3%. This movement made gold more expensive for buyers from other countries and recouped some of last week's decline. American Gold Exchange analyst Jim Wyckoff described the situation as a factor putting pressure on gold.
However, the scale of the decline remained limited — statistics showed a notable slowdown in employment growth in June. Data on wages for previous periods were also revised downward.
Weak macroeconomic indicators significantly reduced the likelihood of an imminent tightening of monetary policy. According to calculations by the CME FedWatch Tool service, investors estimate the chances of a rate cut in September at approximately 56%. Currently, market players are focused on the minutes of the Federal Reserve's closed meeting, the publication of which is scheduled for Wednesday.
JPMorgan softens forecast but maintains long-term positive outlook
In July, JPMorgan lowered its own gold forecast for the fourth quarter by about 25%. As recently as June 9, the bank expected gold to rise to $6,000 by the end of the year.
Bankers attributed the price decline to reduced demand from key industries. They warned that risks are skewed to the downside if inflation accelerates again in the summer.
At the same time, JPMorgan maintains a positive long-term outlook for the metals market. Analysts expect gold to continue rising at least until 2027, as central banks continue active purchases.
The bank also forecasts that the average price of silver will be $60-65 per ounce. For platinum, a gradual increase is expected, while for palladium, a moderate decline is anticipated through 2027. The Fed minutes, to be published on Wednesday, could change rate expectations, and with them, the dynamics of gold.
My expert commentary: The correction in gold amid the strengthening dollar is a temporary phenomenon. Fundamental factors, such as the reduced likelihood of rate hikes and active central bank purchases, continue to support the long-term bullish trend. The revision of JPMorgan's forecast from $6,000 to $4,500 is a reasonable adjustment reflecting current macroeconomic uncertainty, but it does not negate the overall positive sentiment toward precious metals.