Gold Falls Despite Global Warming!
Gold prices weakened as market participants ignored escalating geopolitical tensions and instead focused on this week's string of US economic data. Gold briefly approached US$4,470/oz after rising more than 4% in the previous three sessions, but then reversed course as the market awaited the Fed's interest rate policy direction.
Despite this, geopolitical headlines were hot: Trump said Venezuela would hand over up to 50 million barrels of oil to the US, the White House did not rule out military options regarding Greenland, and China tightened export controls to Japan for "dual-use" (potentially military) goods. But for now, gold sentiment is driven primarily by one factor: US data.
The biggest focus is on Friday's US jobs report (NFP), after Tuesday's manufacturing indicator came in weaker than expected. The slowdown in data has made the market more confident that the Fed still has reason to cut interest rates again—and this is usually positive for precious metals since gold does not yield interest.
Expectations for interest rate cuts also strengthened following comments by Fed official Stephen Miran, who stated that interest rates would need to be cut by more than one percentage point by 2026 to keep the economy moving. Last year, a series of interest rate cuts fueled gold's rally, which saw its best annual performance since 1979, while silver even surged nearly 150% due to supply shortages and concerns about import tariffs.
On the other hand, there are short-term obstacles: commodity index rebalancing has the potential to trigger selling by passive funds to adjust to the new weightings. Estimates suggest a large outflow from gold and silver futures contracts. In recent trading, gold fell 0.6% to US$4,466.04/oz, silver fell as much as 2.2% and was last down around 1.9% to US$79.69/oz; platinum and palladium also weakened, while the dollar index edged higher. (asd)
Source: Newsmaker.id
