Gold prices fell as geopolitical tensions in the Middle East eased, reducing demand for the precious metal as a safe haven, and traders looked ahead to upcoming U.S. data that will shed light on monetary policy expectations.
Gold prices fell slightly below $2,364 an ounce, after rising for five consecutive weeks, recording the longest winning streak in more than a year, and prices during this period reached a record level.
Israel and Iran have traded military strikes, raising fears of a full-scale war across the region, but Tehran has downplayed the impact and significance of Israel's latest offensive, while denouncing attempts to downplay the success of its latest assault on Israel.
Gold prices and US interest
Away from the Middle East tensions, traders are focusing on U.S. economic data due on Friday, with the personal consumption expenditures price index expected to rise 2.6% last month from a year earlier, after rising 2.5% in February. That could support the Federal Reserve’s policymakers’ push to delay interest rate cuts, and such decisions typically weigh on gold because they do not provide investors with much value.
Gold prices have risen by about 15% since the beginning of the year, supported by central bank purchases and strong demand in Asia, especially China.
The rise came despite a rise in the US dollar and 10-year Treasury yields, factors that are usually headwinds for the precious metal. In light of this, banks including Goldman Sachs have increased their price targets for gold.
Spot gold was down 1.2% at $2,363.55 an ounce at 11:27 a.m. Singapore time, while 10-year Treasury yields advanced and the Bloomberg Dollar Spot Index was little changed. Silver fell nearly 3% after four straight weeks of gains, while palladium and platinum also fell in trading.
