Gold Prices Weaken Amid Dollar Pressure
Spot gold prices weakened sharply on Friday (May 15th), dropping around 2% to $4,560.48 per ounce at 9:46 a.m. London time. Pressure was also seen on other precious metals, particularly silver, which fell further by 6% to US$78.50 per ounce.
The weakening gold price occurred in line with the strengthening of the US dollar. The Bloomberg Dollar Spot Index rose 0.3% and has strengthened by around 1% so far this week. This makes gold more expensive for holders of other currencies, leading to a decline in buying interest in precious metals.
The pressure on gold also indicates that the market is reassessing the risk of high interest rates in the United States. When the dollar strengthens and interest rates remain high, gold's appeal as a non-yielding asset typically diminishes. This has led some investors to take profits after the previous gold price increase.
In our opinion, this gold correction more reflects the strengthening dollar and a short-term rotation in the precious metals market. However, room for weakness could be contained if global geopolitical tensions escalate again.
Currently, market focus remains on the direction of the US dollar, expectations for Fed policy, and conflict developments that could impact demand for safe-haven assets.
Source: Newsmaker.id
