On Tuesday, gold prices experienced a notable decline, reaching their lowest point in over two weeks. Several factors contributed to that dip, including declining concerns over a potential escalation in the Middle East crisis and profit-taking by investors. Markets also await the upcoming U.S. economic data and its impact on the Federal Reserve‘s stance on interest rates.
In Saudi Arabia, 24-carat gold saw a 1.02 percent decline to SAR278.45 per gram and SAR8,662.22 per ounce.
Globally, spot gold saw a 0.67 percent decline to $2,311.69 per ounce, as of 5:42 GMT. Meanwhile, U.S. gold futures saw a 0.98 percent decline to $2,323.30.
Profit booking
Gold prices had witnessed a remarkable surge, hitting a record high of $2,431.29 on April 12. However, they dipped more than 2 percent in the previous session, marking the largest intraday decline in over a year. This recent pullback suggests that investors viewed the high prices as an opportunity to secure profits. Analysts emphasized that investors were capitalizing on gold’s recent strong performance, opting to lock in profits amidst the current market conditions.
Analysts also noted that gold had been influenced by various buying patterns in recent months, with safe-haven demand now diminishing. The easing of fears regarding a broader conflict in the Middle East contributed to the decline in gold prices.
Key U.S. economic data
The focus of the week for investors lies on crucial economic indicators from the United States. Thursday’s release of gross domestic product (GDP) data and Friday’s personal consumption expenditures (PCE) data should provide insights into the trajectory of the Federal Reserve’s interest rate policies. Analysts suggest that positive data could prolong the wait for interest rate adjustments, potentially leading to further declines in gold prices in the short term.
Markets now expect a 0.3 percent rise in headline PCE numbers in March with no changes compared to February 2024.
Read: Saudi Arabia gold prices decline as Middle East tensions ease, global rates drop
Other precious metals
In addition to gold prices, other precious metals also experienced declines. Spot silver fell approximately 1 percent to $26.92 per ounce, while spot platinum dropped 0.7 percent to $911.10. Palladium saw a 1.1 percent slump, reaching $997.75 per ounce. The broader downward trend in precious metals prices reflects the current market sentiment.
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