Sharp drop in precious metals in global markets
As rising energy costs and the Fed's monetary policy expectations pushed spot gold below $4,100, silver prices experienced losses exceeding 4%.
In global markets, rising energy costs and expectations of tightening in the monetary policy of the US Federal Reserve (Fed) put pressure on precious metals. Spot gold dropped to $4,058, falling below the critical $4,100 threshold, while the spot price of silver declined to $55 with a loss of over 4%.
The selling wave in precious metals was not limited to gold; a downward trend was also recorded in platinum and palladium prices. Analysts note that the high interest rate environment increases the opportunity cost of non-yielding assets like gold.
Assessment: Although geopolitical risks and changes in bond yields are normally supportive elements for gold, market expectations that the Fed will keep interest rates high for a long time appear to have suppressed this safe-haven demand.
Sources
- cnnturk.com · Link