Sharp Decline in Gold Prices Driven by Global Markets and Geopolitical Developments

Driven by global inflation concerns, geopolitical tensions between the US and Iran reflecting on energy prices, and expectations that the US Federal Reserve will keep interest rates high, selling pressure on gold prices continued for the fourth consecutive trading session.

Decline Process in Gold Prices

Spot gold, which exhibited one of its strongest monthly performances of the year in August, started September with a decline, and the selling continued into the fourth trading session.

Having tested a three-week high last week, the precious metal gave back its gains, dropping below the $4,500 level, and fell toward the $4,300 levels as the sell-off deepened.

Geopolitical Tensions and Inflation

Escalating clashes following US airstrikes against Iran and retaliation from Tehran's administration drove up oil and agricultural product prices, re-triggering global inflation concerns.

Expectations that the increase in energy prices would fuel inflation and that the US Federal Reserve would keep interest rates high for a longer period put pressure on gold.

Expert Evaluations and Markets

Saxo Bank Head of Commodity Strategy Ole Hansen attributed the decline to rising interest rate expectations, increasing bond yields, and a strengthening dollar, while the rise in bond yields accelerated the flight from gold.

In technical analysis, spot gold falling below its 200-day moving average and critical support levels strengthened the selling pressure; US December gold futures also dropped nearly 1% to $4,350.80.

Long-Term Record Expectations

Although it is stated that volatility and selling pressure may persist in the short term, some major financial institutions continue to maintain their long-term bullish expectations.

RBC Capital Markets expects spot gold to trade in the $4,500-$5,000 band for the rest of the year, while forecasting that the price could reach $5,296 in 2027.