Gold prices are down $24, the biggest drop in a week
Gold prices fell more than $24 in trading on Tuesday, the largest drop in a week, supported by a rise in US Treasury yields.
The decline comes as investors await the US Federal Reserve’s decision to raise interest rates, as well as renewed hopes for a solution and a ceasefire, with progress in the Russian-Ukrainian talks.
Gold Prices Today
The price of gold futures contracts – April delivery – decreased by 1.34%, equivalent to $ 26.30, to reach the level of $ 1934.50 an ounce.
The prices of the yellow metal ended its trading on Monday, down by more than 24 dollars, with the rise in US Treasury yields, and the follow-up to the Russian-Ukrainian talks.
The price of spot delivery of the yellow metal also fell by 1.22%, to reach $1,926.16 an ounce.
At the same time, the price of silver futures contracts – May delivery – decreased by 1.55%, at $24.62 an ounce.
While the spot platinum price decreased by 1.84%, at $ 1013.52 an ounce, in contrast, the spot palladium price rose by 1.4%, at $ 2404.61 an ounce.
US Treasury yields jumped to a 2-1/2-year high on Monday, ahead of the Federal Reserve’s decision, expected tomorrow Wednesday, to raise interest rates to tame rising inflation that shows no signs of slowing.
Gold is very sensitive to rising US interest rates, which increases the opportunity cost of holding unprofitable bullion.
A number of analysts revealed that gold prices are declining due to the US Federal Reserve’s position to normalize monetary policy, which increases US bond yields and supports the dollar, as well as continued easing of restrictions with continued high rates of economic growth.
The Russian and Ukrainian delegations held the fourth round of talks yesterday – on video communication technology – but no new progress was announced, and the talks are scheduled to resume on Tuesday.
“The market may have become less concerned with the situation in Ukraine, which just got a boost from safe-haven assets like gold,” said Dominic Schneider, head of commodities at UBS Wealth Management.
Chief analyst Jeffrey Haley said: “In addition to gold’s problems, the market appears to be late in waking up to the implications of this week’s hawkish Fed meeting, as higher US yields won’t help gold.”
“Spot gold may seek support in the $1925-$1929 ounce region,” said technical analyst Wang Tao.
Gold Market Forecast
“Barring any unexpected events in the current conflict between Russia and Ukraine, we expect the price of gold to stabilize around $1,900 an ounce over the following weeks,” said Michael Langford, director of corporate advisory firm Airgood.
Global stocks rose as diplomatic efforts to end the war in Ukraine intensified on Monday; Ukrainian and Russian negotiators are set to speak again after both sides signaled progress.