Gold prices declined from their record high on Tuesday as the U.S. dollar strengthened. Multiple factors raised gold prices to a new record high, including growing Federal Reserve interest rate cut speculations and ongoing regional geopolitical tensions, which drove the precious metal’s safe-haven appeal.
In Saudi Arabia, 24-carat gold saw a 0.64 percent decline to SAR291.3Â per gram and SAR9,060.59Â per ounce.
Globally, spot gold saw a 0.50 percent decline to $2,413.07 per ounce, as of 5:07 GMT, after hitting a record high of $2,440.49 on Monday. Meanwhile, U.S. gold futures saw a 0.84Â percent decline to $2,417.90.
The dollar index rose 0.1 percent, making greenback-priced bullion less attractive to buyers holding other currencies, further contributing to its downward trend.
Interest rate cuts
Lower interest rates amid geopolitical uncertainty make gold more favorable as a safe-haven investment, thus supporting its prices. Following economic data revealing a decline in inflation, market expectations of an interest rate cut soon have increased. In addition, geopolitical tensions in Russia and the Middle East continue to support the increases in gold prices.
In addition, demand for gold in China surged during the first quarter of the year to its highest since 2017, which pushed prices higher even amid investment outflows in exchange-traded funds.
Read: Oil prices dip amid fears on U.S. inflation, higher interest rates dampening demand
Other precious metals
In addition to gold prices, spot silver fell 1.31Â percent to $31.41 after hitting an over 11-year high earlier this week. So far this year, silver has gained almost 25 percent, outperforming gold and other precious metals.
Platinum declined 1.15 percent to $1,034.75, after hitting its highest since May 12, 2023, on Monday, while palladium lost 1.59 percent to $1,010.51.
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