Gold prices extended their losses, declining 0.3 percent to $2,318.90 per ounce, hitting their lowest point since April 5. This drop follows a rally in March and April that saw gold prices surge nearly $400, reaching an all-time high of $2,431.29 on April 12, as per Reuters. US gold futures also experienced a 0.6 percent decline, reaching $2,331.80.
Meanwhile, spot silver remained relatively stable at $27.17. Platinum, used in auto catalysts, fell 0.5 percent to $912.90, while palladium saw a 1.2 percent increase, reaching $1,020.75. On the multi-commodity futures market, gold futures in India dipped by 0.22 percent, trading at 71,042 per gram.
Analysts attribute this decline in gold prices to diminished fears of escalation in Middle East tensions. Israel’s intensified airstrikes on Gaza, marking some of the heaviest shelling in weeks, initially fueled concerns. However, Iran’s recent announcement that it has no plans for retaliation following an Israeli drone attack has eased these concerns. As a result, financial markets have exhibited a growing risk appetite, leading to a decline in the demand for safe-haven assets like gold.
The market is also closely monitoring signals from the US. Recent statements from US Federal Reserve officials indicate that interest rates may not be lowered in June, as was previously anticipated. This has reduced the appeal of non-interest-paying gold. Instead, traders now expect the first Fed rate cut to occur in September, at the earliest.
Investors will be closely scrutinizing the US GDP data, scheduled for release on Thursday, and the Personal Consumption Expenditures (PCE) figures on Friday. These data will provide further insights into the health of the US economy and the potential timeline for interest rate cuts.
