Gold Weakens, Risk-On Returns
Gold prices continued to decline after previously recording their first weekly decline since mid-August. The precious metal fell as much as 1.2% to near $4,065 per ounce as safe-haven sentiment began to cool. The primary cause: the United States and China both signaled they were close to reaching a trade deal, in line with President Donald Trump's visit to Asia. If geopolitical tensions ease, the market's need to flee to safe assets like gold will automatically diminish.
This drop in gold follows a brutal rally since mid-August that pushed prices to a record high above $4,380 early last week. After rising too quickly, many traders aggressively took profits. Several technical indicators have also long indicated overbought conditions. However, over time, gold has still risen more than 55%. The main supporting factors: global central banks continue to buy gold, and concerns about currency depreciation and growing government debt have led investors to choose gold over bonds or cash.
While prices are falling, physical demand is actually strong. This drop is being hailed as a "bargain price" moment, with shops and dealers from Singapore to the US reporting strong buying interest from retail buyers. At the same time, the global gold industry is also gathering again on a large scale in Kyoto. Nearly a thousand professional traders, brokers, and refiners are attending the London Bullion Market Association's annual conference, which this year saw a record number of attendees. One of the hot topics there: the increasingly fierce competition for gold trader talent.
Looking ahead, the gold market will be looking ahead to central bank week. The Fed is expected to cut interest rates by 25 basis points, while the European Central Bank (ECB) and the Bank of Japan (BOJ) are expected to hold rates steady. Typically, lower interest rates are good news for gold, as it pays no interest. As of this morning in Singapore, the spot gold price was down about 0.7% at around $4,083.92 per ounce, while silver also weakened after falling more than 6% last week. (asd)
Source: Newsmaker.id
