After Soaring, Is Gold Now Threatened to Sink?
The price of gold bullion moved lower and is estimated to record a second consecutive weekly loss after the global market showed a recovery in risk appetite. The ceasefire between Israel and Iran has reduced demand for safe haven assets such as gold. On Friday (6/28), the price of gold fell more than 1% to around $3,291 per ounce, and fell more than 2% for the week.
The decline in gold prices was triggered by easing geopolitical tensions, especially after the leaders of Israel and Iran agreed to stop the conflict that had lasted almost two weeks. The market is also increasingly optimistic about the trade outlook, after US Commerce Secretary Howard Lutnick stated that the US and China had reached a trade understanding, as well as the White House's plan to make deals with 10 major trading partners. This strengthened positive sentiment and suppressed demand for precious metals.
Even so, gold has still recorded an increase of more than 25% so far this year, and remains only around $200 from its record high in April. Support for gold prices also came from large-scale buying by global central banks and expectations that the Federal Reserve will cut interest rates in the near future. Lower interest rates are usually a positive driver for gold prices because they lower the opportunity cost of holding.
At 1:07 p.m. Singapore time, gold prices were down at $3,294.47 an ounce, while the Bloomberg Dollar Spot Index edged up 0.1%. Among other precious metals, silver also weakened, while palladium posted a gain of about 9% for the week. Platinum briefly touched its highest level in more than a decade before experiencing a price correction.
Source: (ayu-newsmaker)
