The shifting fundamentals are also beginning to weigh on the bullion market.
“With gold having no yield and limited industrial use, as we approach Fed tightening (or expectations thereof) we still think gold has no friends,” Jeremy Hale, a global macro strategist at Citigroup, said in the Barron’s article. “This leaves a bleak price outlook for the yellow metal, so long as the Fed hawkish tone and USD bid remain.”
The strengthening U.S. dollar is making USD-denominated gold less attractive to foreign buyers.
“The prospect of firmer rates, coupled with our expectation for a stronger dollar, present significant headwinds for gold and are likely to skew risks to the downside,” Barclays Plc analysts said in a Bloomberg article.
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Max Chen contributed to this article.