Gold, Silver Rate Today Live Updates: International gold, silver prices continue to drop as dollar strengthens

Deutsche Bank has lowered its outlook for gold prices by slightly more than 20%, cautioning that the metal could decline to $3,800 per ounce if financial markets begin factoring in three to four interest rate increases by the US Federal Reserve. The bank said the balance of risks for bullion has shifted clearly to the downside due to changing monetary policy expectations.

In a report on precious metals, Deutsche Bank analyst Michael Hsueh said the bank’s revised central scenario projects gold at $4,800 per ounce in the fourth quarter, assuming the Federal Reserve keeps rates unchanged for an extended period. However, in a downside scenario where markets price in three to four rate hikes, gold could fall to $3,800 per ounce.

The report noted that the repricing of Federal Reserve expectations, combined with continued strength in US economic data, has been the key factor driving gold prices lower.

Data from Investing.com showed that August gold futures dropped 1.6% on Tuesday to $4,135 per troy ounce. The precious metal has retreated significantly from its record high of $5,589 per troy ounce, reached at a time when some market participants had expected prices to surpass the $6,000-per-ounce mark.

Globally, gold prices have declined by nearly 10% over the past month.
The report also highlighted weakening demand trends across Asian markets, signalling a deterioration in appetite for the traditional safe-haven asset.