Gold prices experienced a downturn on Monday as fears of a broader conflict in the Middle East diminished, reducing bullion’s safe-haven allure.
In Saudi Arabia, 24-carat gold saw a 1.45 percent decline to SAR284.67 per gram and SAR8,854.27 per ounce.
Globally, spot gold saw a 1.21 percent decline to $2,363.10 per ounce, as of 6:00 GMT, after reaching $2,417.59 in the previous session, a level close to its all-time high of $2,431.29 it hit on April 12. Meanwhile, U.S. gold futures saw a 1.42 percent decline to 2,379.60.
Lack of catalysts supporting gold prices
Analysts noted a lack of significant catalysts to propel gold prices higher. They pointed out that the market is grappling with the rising costs of holding gold, contributing to the current downward pressure. Nevertheless, market experts still believe that geopolitical tensions will support gold prices in the medium to long term.
Moreover, as fears of a wider conflict in the Middle East subsided, Asian stocks rebounded, and bond yields rose. This shift towards riskier assets reduced the attractiveness of non-yielding bullion, further contributing to the decline in gold prices.
U.S. inflation data
Investor attention now turns to key U.S. inflation data scheduled for later in the week. The personal consumption expenditures price index, the Federal Reserve‘s preferred inflation gauge, is due on Friday. This index will provide insights into inflationary pressures, potentially influencing future interest rate decisions. Hence, increased interest rates raise the opportunity cost of holding non-yielding assets like gold, making them less attractive to investors.
Other precious metals
In addition to gold prices, other precious metals saw mixed movement. Spot silver saw a 2.3 percent decline to $27.99 per ounce. Spot platinum rose 0.3 percent to $934.03. Meanwhile, palladium fell 0.3 percent to $1,023.17.
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