At the close of trading on 15/5, spot global gold prices decreased by 112 USD, settling at 4,539 USD per ounce. During the session, prices at one point fell close to 4,510 USD, marking the lowest level since the 4/5 session. Overall for the week, the precious metal recorded a 2,5% loss.
The market declined as both the US dollar and US government bond yields strengthened. Additionally, inflation concerns intensified due to the Middle East conflict, reinforcing expectations of potential interest rate hikes.
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Global gold prices lost over 100 USD during the 15/5 session. Chart: Kitco |
Global gold prices lost over 100 USD during the 15/5 session. Chart: Kitco
"Many factors are causing a sell-off in the precious metals market. The dollar is quite strong today. Furthermore, not just in the US, but global bond yields are also rising", explained Edward Meir, an analyst at Marex.
The yield on 10-year US government bonds is currently nearing a one-year peak, increasing the opportunity cost of holding non-yielding assets like gold. The dollar index, which measures the currency's strength against six other major currencies, also rose for five consecutive sessions, marking its strongest weekly gain in two months at 1,5%. A stronger US dollar makes gold more expensive for buyers outside the US.
US President Donald Trump stated this week that he is running out of "patience" with Iran. The US delegation also left China without any breakthrough announcements on trade or efforts to end the Middle East conflict.
Global crude oil prices have risen over 40% since the conflict erupted in late February, accelerating global inflation. Central banks tend to raise interest rates during inflationary periods, making gold less appealing as it offers no yield. CME's FedWatch Tool indicates that investors are no longer betting on the Federal Reserve (Fed) cutting interest rates this year.
Global silver prices fell 9% at the end of the week, reaching 75,8 USD per ounce. Rhona O'Connell, an analyst at StoneX, suggested that silver had been overbought and was undergoing a correction. Palladium and platinum lost 2,2% and 3,6% respectively. All recorded a weekly decline.
By Ha Thu (according to Reuters)
