Gold prices have started to rise: the main reasons
18 May 16:19
Gold rose slightly on Monday, May 18, rebounding from a more than one-and-a-half-month low reached earlier in the session; however, the rise in prices is limited as mounting inflation fears and high interest rates are pushing up government bond yields. This is reported by "Komersant Ukrainian" citing Reuters.
The spot price of gold hovered around $4,540.25 per troy ounce, having touched a low not seen since March 30 during the session.
“From a technical standpoint, the decline in prices appears unjustifiably sharp, and markets seem unwilling to let it enter bear territory, as structural factors supporting gold remain in place and help it find support levels,” said Nikos Tsabouras of Jefferies.
The analyst added that since markets are no longer pricing in a Fed rate cut this year—and, on the contrary, expectations of a hike are rising—the prospect of high rates persisting for a longer period is putting direct pressure on non-yielding assets such as gold.
Traders are increasingly pricing in a U.S. interest rate hike by year-end: the probability of a Fed rate hike in December is estimated at 40%, according to CME’s FedWatch data.
Meanwhile, banks have begun lowering their short-term gold price forecasts due to weakening investment demand. JP Morgan lowered its average price forecast for the precious metal for 2026 to $5,243 per ounce from $5,708.
Palladium fell 0.26% to $1,408.75 per ounce, while silver dropped 0.31% to $75.71 per ounce.
The price of platinum fell by 0.27% to $1,968.07.
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