Sharp Decline in Gold Prices Driven by Global Markets and Geopolitical Developments
The decline in gold prices reached its fourth trading session due to global inflation concerns, strengthening bond yields, and the Fed's interest rate policy expectations.
Growing inflation concerns in global markets, a strengthening dollar, and rising bond yields caused selling pressure on gold prices for the fourth consecutive trading session. While conflicts between the US and Iran and geopolitical risks in the Middle East were expected to increase safe-haven demand, these developments triggered inflation through energy prices and reinforced expectations that the Fed would keep interest rates high, exerting pressure on precious metals.
Global Markets and Selling Pressure
The sharp sell-off in gold prices in recent days accelerated as the balances in global markets shifted. The decline in the precious metal extended to its fourth consecutive trading session.
Interest Rate and Bond Impact
The increase in inflationary pressure strengthened expectations that the US Federal Reserve (Fed) would keep interest rates high for a longer period or potentially raise rates. It was stated that the probability of the Fed raising interest rates this month approached 70 percent this week, compared to around 30 percent last week.
Bond and Dollar Status
The US 10-year Treasury yield rose to around 4.82 percent, reaching its highest levels in nearly 3 years. The dollar index hovered near a two-week peak around 100.
Price Levels and Technical Outlook
Variations in ounce gold and gram gold levels were observed according to different sources. According to Posta, Cumhuriyet, and Haber7 sources, ounce gold retreated to the levels of 4,300 - 4,304 dollars, while gram gold fell below the band of 6,684 - 6,700 TRY. TRT Haber reported that ounce gold found buyers at 4,139 dollars in the new trading session and gram gold traded at the level of 6,708 liras.
Expert Opinions and Long-Term Expectations
Institutions such as Saxo Bank Commodity Strategy Head Ole Hansen and RBC Capital Markets projected that central bank gold purchases, investor fund inflows, public debts, and long-term concerns regarding the global monetary system could continue to support gold.
Future Forecasts
RBC Capital Markets expects ounce gold to trade in the 4,500-5,000 dollar band for the remainder of the year, while predicting that the price could reach 5,296 dollars in 2027.