The price of the precious metal edged lower after hitting a two-week high. The main reason for this movement was the strengthening of the US currency. During trading, the spot price of gold fell by 0.58% to $4,141.26 per troy ounce.
Dollar strength forces gold to retreat
By Tuesday morning, July 7, the dollar had gained 0.3%. This move made gold more expensive for buyers from other countries and reversed some of last week's decline. Analysts note that the situation has become a factor of 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.
JPMorgan softens forecast but maintains positive long-term outlook
Experts at investment bank JPMorgan still expect prices to rise to the $4,500 level in the final quarter of the year. The scenario remains relevant despite the recent revision of targets. Previously, the company's analysts suggested that exchange prices could test the $6,000 per ounce mark by the end of December. Consequently, the target has decreased by about a quarter.
Bankers attributed the price decline to lower demand from key industries. They warned that risks are tilted 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, gradual growth is expected, while for palladium, a moderate decline is anticipated through 2027. The Fed minutes, to be released on Wednesday, could change rate expectations and, along with them, the dynamics of gold.
Expert comment: The correction in gold amid dollar strength is a temporary phenomenon. Fundamental drivers such as central bank purchases and expectations of Fed monetary policy easing remain in place. JPMorgan's forecast of $4,500 by year-end looks quite realistic, especially if macroeconomic data continues to point to a slowdown in the US economy. The main risk is an unexpected surge in inflation, which could delay rate cuts.