Gold prices fell more than 1% on Tuesday, June 23, as market bets on a year-end U.S. interest rate hike and the dollar consolidated at a 12-month high.
Spot gold fell to $4,142.61 an ounce, while futures for August delivery fell to $4,160.20, amid pressure from rising U.S. bond yields and expectations of tighter monetary policy.
The moves follow statements from US officials, most notably Vice President J.D. Vance, who confirmed progress in talks with Iran, easing geopolitical tensions that have been supporting gold prices in recent weeks.
Chicago Fed President Austin Goolsby said the bank was watching whether inflation would remain high or ease as the impact of tariffs eased.
The CME FedWatch tool shows that markets are pricing in an 88% probability of a rate hike in December, compared to 61% just a week ago, putting pressure on precious metals that have recorded collective declines in silver: -3.3%, platinum: -1.9% and palladium: -1.8%
Oil continues to lose
Oil prices continued their slide for the second session, as concerns about supply disruptions through the Strait of Hormuz eased after the U.S.-Iran talks, with Brent crude falling to $77.70 and West Texas Intermediate crude falling to $73.74.
The declines followed a sharp drop of more than 3% yesterday, following Washington's grant Tehran a 60-day waiver of sanctions, and the reduction of Israeli bombardment in Lebanon as part of a broader de-escalation agreement.
Ship-tracking data showed two tankers carrying about 2 million barrels of oil passed through the strait yesterday, indicating a gradual recovery in cargo traffic after a decline last weekend.
Analysts at ING and Sparta Commodities believe that the market is moving between waves of optimism and pessimism, with no full clarity on the political agreement.
In the United States, the Strategic Reserve fell to 331.2 million barrels, the lowest level since 1983, reflecting continued pressure on U.S. supplies, Department of Energy data showed.
Yen nears 40-year low
The dollar remained strong as U.S. bond yields rose, with the dollar index climbing to 101.01, close to a one-year high.
The yen fell to 161.59 to the dollar, approaching 1986 levels, prompting Japan's finance minister to hold an emergency meeting with the U.S. Treasury Department to discuss possible intervention in the exchange market.
The euro settled at $1.1423 and the pound at $1.3246, amid anticipation of a transition of power in Britain following the resignation of Prime Minister Keir Starmer.
SpaceX enters the bond market for the first time
SpaceX has turned to the bond market for the first time, capitalizing on the momentum following its $85.7 billion initial public offering (IPO) and raising its liquidity to more than $1 billion, in a remarkable development within the technology and space sector.
US reports said the company is seeking to replace short-term financing with long-term debt, in a move aimed at restructuring its balance sheet without compromising shareholder shares, especially with Elon Musk retaining 82% of the voting rights.
The company's shares fell 9% in its third downward session since listing, amid rising spending on artificial intelligence and Starship rocket projects, despite Starlink's revenue growing 33% last year.
SpaceX signed a massive computing agreement with Reflection AI worth up to $6.3 billion to boost Musk's data center capabilities.
The company has received credit ratings in the investment grade category: Baa1 from Moody's and BBB+ from Fitch, reflecting market confidence in its ability to finance its large capital projects and continue to grow despite rising expenses.
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