Gold rate today: Gold price prediction: Will gold rate go up in August even if Strait of Hormuz remains closed, Iran war continues? Details here

The gold price continues to remain at the lower threshold after hitting its lowest level since July 1. While spot gold decreased by 3 percent to $3,998.52 per ounce, spot silver decreased by 3.8 percent to $57.56 per ounce.

Gold prices fell 3 percent on Monday after U.S. President Donald Trump said he would restart a naval blockade of Iran, boosting oil markets, reigniting inflation concerns and raising expectations that U.S. interest rates will be higher for a long time. Spot gold fell 3 percent for the second consecutive session to $3,996.76 per ounce.

Why is the Gold Price Falling?

Fears about closing the Strait of Hormuz have sent oil prices sharply higher, while reviving expectations for higher interest rates to combat inflationary pressures from rising hostilities in the Middle East.

“Any outbreak of violence in the Gulf is accompanied by pressure on gold,” said Nicholas Frappell, head of global institutional markets at ABC Refinery. “The question is: if the Strait of Hormuz remains effectively or partially closed, will that lead to a deflationary effect going forward? If demand destruction leads to reduced economic activity, that could actually be supportive for gold,” Frappell said. added Frappell.

Kevin Warsh’s first six-month testimony before Congress as Federal Reserve chairman and June’s slate of key U.S. economic data, including CPI, PPI and retail sales, will be closely watched this week for new clues about the outlook for the economy, inflation and monetary policy.
Statements later in the day from Fed policymakers, including Vice Chairwoman Michelle Bowman and Governor Christopher ‌Waller, are also in focus because they could provide insight into how inflationary pressures are affecting the central bank’s stance on interest rate hikes. Investors are currently pricing the likelihood of a U.S. Fed rate hike at 72 percent in September, up from about 63 percent last week, according to the CME FedWatch Tool.

​COMEX gold speculators reduced their net long position by 1,964 contracts to 114,854 in the week through July 7, following three consecutive weeks of gains, data released Friday showed.