Gold falls from record highs as dollar stands firm
Bullion slips as greenback strengthens, making the metal less attractive to buyers holding other currencies
21 May 2024 - 07:21
bySherin Elizabeth Varghese
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Bengaluru — Gold prices eased on Tuesday as the dollar firmed, the metal backing away from a record peak hit in the previous session as a fusion of bullish factors, including growing US rate cut bets and geopolitical risks, drove safe-haven demand.
Spot gold was down 0.6% at $2,410.73/oz by 3.35am GMT after hitting a record high of $2440.49 on Monday. US gold futures fell 1% at $2,414.00.
The dollar rose 0.1% making greenback-priced bullion less attractive to buyers holding other currencies.
Lower interest rates and geopolitical uncertainty make bullion a favourable investment.
“The market expectations of interest rate cuts starting this year has gone up a bit with the cooling inflation numbers that came in last week and on the other side, geopolitical risks played a major role in pushing gold prices to a fresh record high,” said ANZ commodity strategist Soni Kumari.
“China buying has been exceptional in the first quarter, with their bar and coin demand being very strong, recording its highest since 2017, and these factors are offsetting the investment outflows in ETFs [exchange traded funds] and pushing prices higher.”
Iranian President Ebrahim Raisi was killed when his helicopter crashed in poor weather in mountains near the Azerbaijan border on Sunday.
Minutes of the Federal Reserve’s last policy meeting due on Wednesday along with comments from a slew of Fed speakers will be keenly awaited this week.
Spot silver fell 1.5% to $31.35/oz after hitting a more than 11-year high in the last session.
“Silver is the beta for gold, investors are attracted to silver because fundamentals are very strong coupled with growing industrial demand and it's a cheaper alternative to gold,” Kumari said.
Platinum lost 1.1% to $1,035.15, after hitting its highest since May 12, 2023 on Monday. Palladium dropped 1.8% to $1,008.91.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Gold falls from record highs as dollar stands firm
Bullion slips as greenback strengthens, making the metal less attractive to buyers holding other currencies
Bengaluru — Gold prices eased on Tuesday as the dollar firmed, the metal backing away from a record peak hit in the previous session as a fusion of bullish factors, including growing US rate cut bets and geopolitical risks, drove safe-haven demand.
Spot gold was down 0.6% at $2,410.73/oz by 3.35am GMT after hitting a record high of $2440.49 on Monday. US gold futures fell 1% at $2,414.00.
The dollar rose 0.1% making greenback-priced bullion less attractive to buyers holding other currencies.
Lower interest rates and geopolitical uncertainty make bullion a favourable investment.
“The market expectations of interest rate cuts starting this year has gone up a bit with the cooling inflation numbers that came in last week and on the other side, geopolitical risks played a major role in pushing gold prices to a fresh record high,” said ANZ commodity strategist Soni Kumari.
“China buying has been exceptional in the first quarter, with their bar and coin demand being very strong, recording its highest since 2017, and these factors are offsetting the investment outflows in ETFs [exchange traded funds] and pushing prices higher.”
Iranian President Ebrahim Raisi was killed when his helicopter crashed in poor weather in mountains near the Azerbaijan border on Sunday.
Minutes of the Federal Reserve’s last policy meeting due on Wednesday along with comments from a slew of Fed speakers will be keenly awaited this week.
Spot silver fell 1.5% to $31.35/oz after hitting a more than 11-year high in the last session.
“Silver is the beta for gold, investors are attracted to silver because fundamentals are very strong coupled with growing industrial demand and it's a cheaper alternative to gold,” Kumari said.
Platinum lost 1.1% to $1,035.15, after hitting its highest since May 12, 2023 on Monday. Palladium dropped 1.8% to $1,008.91.
Reuters
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.