Gold prices, which rose in the first weeks of May due to the impact of geopolitical risks, started to decline again due to the impact of global economic developments. Expectations regarding the US economy and central bank policies increased the pressure on the precious metal. *]:pointer-events-auto R6Vx5W_threadScrollVars scroll-mb-[calc(var(–scroll-root-safe-area-inset-bottom,0px) var(–thread-response-height))] scroll-mt-[calc(var(–header-height) min(200px,max(70px,20svh)))] dir=auto data-turn-id=request-WEB:451918e0-9a3a-4a78-82cb-d86718ceb23f-0 data-turn-id-container=request-WEB:451918e0-9a3a-4a78-82cb-d86718ceb23f-0 data-testid=conversation-turn-2 data-scroll-anchor=false data-turn=assistant In international markets, the spot gold price decreased by 0.3 percent to $4,467 per ounce.
Losses in US gold futures reached 0.9 percent. US Bond Rates Are Pressuring Gold According to analysts, one of the most important reasons for the decline was the rise in US bond interest rates. Especially as 10-year bond interest rates approached the highest levels of the last year, investors turned to interest-bearing investment instruments. Since gold is an investment instrument that does not provide interest income, it may lose its appeal in a high interest rate environment.
Therefore, volatility in bond markets puts direct pressure on the precious metal. Economists state that global risks have not completely disappeared, but investors are turning to safer and more profitable instruments in the short term. Messages from the Fed Stimulated the Markets. Expectations regarding the monetary policy of the US Federal Reserve also stood out as another important factor affecting gold prices. In the statements from Fed officials, the message was given that current interest levels could be maintained within the scope of the fight against inflation and, if necessary, new interest rate increases could be put on the agenda.
These statements strengthened the expectation in the markets that interest rates would remain high for a long time. Investors’ eyes are now turned to the Fed meeting minutes and the economic data to be announced in the coming period. A Strengthening Dollar Reduces Gold Demand Another development that pulled gold prices down was the rise in the dollar index. The appreciation of the US dollar in global markets makes gold more costly for investors using other currencies.
The dollar index increased by over 1 percent in May, reaching its highest levels in recent weeks. This situation caused the demand for gold to be limited. Market experts state that if the dollar remains strong, fluctuations in gold prices may continue. Experts Maintain Hope Although selling pressure is prominent in the short term, analysts agree that gold has not completely lost its strength. Geopolitical developments in the Middle East, high levels of energy prices and global economic uncertainties continue to keep safe haven demand alive.
According to experts, investors will closely follow both Fed policies and global risk factors in the coming period.
Comments
You can write your views about this story. Comments may be moderated according to site settings.