World gold price hit 1-month low
The ability of the Fed to raise interest rates and a stronger dollar made each ounce of gold lose nearly $34 in the first session of the week.
Closing the session on April 25, each ounce of world gold for immediate delivery fell more than 1%, down to $1,898 – the lowest since the end of March. During the session, gold price at one point touched 1,891 USD. Currently, the price hovers around $1,898.
World gold price fell sharply on April 25.
“It looks like the fear of a rate hike has taken over,” said Carsten Menke, an analyst at Julius Baer. The market now predicts that the Fed will raise interest rates by 0.5% in the May meeting. Investors believe that the agency will increase even more strongly in the following months to control inflation.
The price of gold is very sensitive to interest rates and US bond yields. Because they increase the opportunity cost of holding a non-yielding instrument, like gold. Even so, precious metals are still considered a safe store of value in times of economic and political turmoil.
“We think the price of gold will drop to $1,850 in the next three months,” Menke forecast. “We see gold as being too expensive as a haven. Inflationary pressures will ease and make gold less attractive. somewhat”.
The dollar yesterday hit the highest since March 2020 against other major currencies. This is also considered to be the reason contributing to the drop in gold prices yesterday.
Giovanni Staunovo, an analyst at UBS, said that the blockade orders in China have put pressure on physical gold demand. Meanwhile, risk aversion pulled palladium down. Per ounce of palladium yesterday fell 3.4% to $ 2,293. Gold and platinum prices also lost more than 2%.
Ha Thu (according to Kitco, Reuters)
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