June was not a good month for the gold price, where it suffered from its most painful monthly drop since 2016.
During the 30 days of the month, the price moved wildly to either side of the spectrum. It chipped $135.00 or 7% off its May valuation.
On a quarterly basis, the precious commodity dropped $45.00 an ounce, translating to 3%, in the New York Comex.
In the latest commodity charts, gold futures in the same bourse shed off another 0.5%o or $8.00 an ounce. It currently exchanges hands at $1,771.60 an ounce.
Contrary to popular opinion, gold dropped back to the $1,700.00 an ounce threshold. This is during the same time that the market expected it to extend gains and call the $2,000.00 an ounce level into play.
In the early days of June, commodity traders focused heavily on inflation fears. This after the US consumer price index surged above analysts’ expectations.
However, the Federal Reserve’s unprecedented shift in stance rained on the bullion’s parade towards greener pastures.
Last week, insiders noted that the US central bank might return to a hawkish monetary outlook by 2023.
This timeline is significantly earlier than initial expectations of 2024 to 2024.
Similarly, the bettering economic outlook in the world’s most powerful economies also comes to the precious metal’s downside.
Analysts highlighted that gold benefits heavily when uncertainty is at a record high. This is especially evident in 2020 when the metal hit its record high of $2,050.00 an ounce in August.
It was during this time that investors have no catalyst to monitor as vaccinations stayed out of the picture.
Copper Price Falls on China’s Lukewarm Tone
In an update on copper price, the metal’s September contract slid during the same session. It shed off 0.3% from the previous session to $9,407.00 a ton.
Investors weigh heavily on Chinese industrial profit’s slowdown in May. Rising input costs, especially metals, continue to hamper production capacity.
The country’s regulators already advanced warnings to bring into the open its copper stockpiles. This is an attempt to throw water into the burning area, as prices continue to surge at unexpected levels.
Another catalyst that traders monitor is inflation in the United States. Despite the Fed’s continued stance that inflation is transitory, investors are still banking on the hike in consumer prices for the month.
Experts highlighted that the market’s focus will remain on copper as it remains an imperative component of green development.