Photo by Sergei Starostin
Gold prices declined by over 1 percent, reaching their lowest point in more than a week on Thursday, as the US dollar strengthened. Investors are closely monitoring an upcoming inflation report that may provide insights into the Federal Reserve’s monetary policy direction. By 0910 GMT, spot gold had decreased by 1.2 percent to $2,880.79 per ounce, marking its lowest level since February 17. The prices had previously surged to a record high of $2,956.15 on Monday, fueled by safe-haven demand.
Additionally, US gold futures experienced a 0.7 percent drop, settling at $2,909.30. The dollar index increased by 0.2 percent, moving further away from recent 11-week lows, which rendered dollar-denominated gold more costly for holders of other currencies.
In related news, US President Donald Trump has raised expectations for a potential month-long suspension of significant new tariffs on imports from Mexico and Canada, indicating that these tariffs could be implemented on April 2. He also proposed a 25 percent “reciprocal” tariff on European automobiles and various other goods.
The prevailing uncertainty has prompted investors to gravitate towards the dollar, thereby exerting additional pressure on gold, which was already facing profit-taking following its record highs, stated Lukman Otunuga, senior research analyst at FXTM.
Investors are keenly awaiting indications regarding US monetary policy, with several officials scheduled to speak later today and the Personal Consumption Expenditures (PCE) index set to be released on Friday. According to a Reuters poll, the consensus forecast anticipates a monthly PCE index of 0.3 percent, consistent with December 2024 figures.
Market expectations suggest that the Federal Reserve will implement at least two rate cuts this year, with approximately 55 basis points of easing factored in for 2025.
“Any significant alterations to these rate expectations could lead to increased volatility for the non-yielding metal. A mix of geopolitical risks and ongoing tariff issues involving Trump may sustain the interest of gold bulls,” Otunuga remarked.
Spot silver declined by 0.7 percent to $31.62 per ounce, while platinum rose by 0.2 percent to $967.30, and palladium increased by 0.1 percent to $927.50.
