Gold continued to push lower and touched its lowest level in nearly two weeks at $1,816 because the US dollar appreciated noticeably. This trend is set to continue on Wednesday, strategists at Commerzbank report.

ECB Lagarde rejected the idea of raising interest rates by 50 bps in July

“The continued strength of the dollar today is presumably the reason why gold is falling further.”

“Weaker US economic data appear to be behind the firm US currency – consumer confidence declined unexpectedly sharply in June. This is because rate hike expectations were reduced slightly in response as some market participants apparently assume that the US Federal Reserve will not raise interest rates as steeply after all in view of the increasingly gloomy economic outlook. This would somewhat reduce the risk of recession.” 

“Another factor that is likely to have contributed to the firm US dollar is that ECB President Lagarde rejected the idea of raising interest rates by 50 basis points in July, saying that a rate hike on this scale could not happen until September.”