Gold fell 1.4% against the backdrop of the dollar rally

Gold fell on Tuesday after closing yesterday at a high of five weeks, as the dollar rally hit the attractiveness of the precious metal.

The ICE US Dollar Index, which tracks the performance of the US currency against six of its key competitors, climbed to its highest level since March 2020. The rally of the dollar comes amid a barrage of statements by high-ranking Federal Reserve officials about the need to tighten monetary policy to be done at a rapid pace in order to curb frantic inflation.

On Monday, its president Federal Reserve Bank of St. Louis, James Bullard noted that the central bank should move quickly to a neutral stance, while today its head Chicago Fed, Charles Evans estimated that the key interest rate could reach up to 2.5% by the end of the year.

Against this background, the June gold contract lost $ 27.40, or 1.4%, and closed at $ 1,959 an ounce on the New York Mercantile Exchange. This is the lowest closing since April 11th.

Silver also suffered big losses, with the May contract falling 76 cents or 2.9% to $ 25,391 an ounce. Copper for the same month lost nearly 1.8 percent at $ 4,718 a pound.

As for the rest of the metals, July platinum fell 3.1% to $ 988.70 per ounce, while palladium in June fell 2.7% to $ 2,380.40 per ounce.