Gold prices are falling: key factors
12 мая 19:19
Gold prices fell on Tuesday, May 12, from their previous three-week high: weak hopes for a peace deal between Washington and Tehran led to a surge in the dollar and oil prices, clouding interest rate forecasts in the U.S. ahead of key inflation data, reports «Коммерсант Украинский», citing Reuters.
The spot price of gold fell 0.75% to $4,698.55 per troy ounce during the session, though it rose to its highest level since April 21.
“The main factor behind the drop in gold prices is the rise in energy prices, which has once again led to an increase in U.S. Treasury yields ahead of today’s consumer price index release, as well as a stronger dollar,” said Ole Hansen of Saxo Bank.
High oil prices could fuel inflation, increasing the likelihood of interest rate hikes. Although gold is viewed as a hedge against inflation, high interest rates typically put pressure on this non-interest-bearing asset.
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Markets are also focused on Trump’s two-day visit to China, which begins Wednesday and includes a scheduled meeting with Chinese President Xi Jinping.
“Overall, gold remains within its established range, with support at $4,500 and resistance at the 50-day moving average, around $4,757,” Hansen said.
Palladium fell 1.37% to $1,488.25 per ounce, while silver dropped 2.33% to $84.08 per ounce.
The price of platinum fell 2.89% to $2,069.73.
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