Gold Falls for a Seventh Session, High Oil Prices and Fed Signals Pressure Precious Metals
Gold prices fell for a seventh session on Thursday, pressured by surging energy prices that have again raised inflation risks and reduced the chances of an imminent US interest rate cut. Gold briefly fell as much as 6% and headed for its longest losing streak since 2023, while silver plunged more than 10%, reflecting broad pressure on precious metals amid a repricing of interest rates.
The pressure came from a combination of oil rebounding following attacks on key energy facilities in the Persian Gulf and the Fed's tighter-leaning message. The day before, the Fed held interest rates on hold and projected only one cut this year, with Jerome Powell stressing that any easing would depend on slowing inflation. Rising energy costs reinforced the "higher for longer" narrative, which is typically negative for gold because it offers no yield.
On the fund flow front, gold ETFs have reportedly experienced sustained outflows in recent weeks, adding to the pressure as demand for ETFs is highly sensitive to changes in interest rates. High volatility has also led some investors to treat gold more as a liquid asset for margin needs than a pure safe haven, especially after its strong rally at the start of the year.
At 12:54 p.m. in London, spot gold fell 5.3% to US$4,564.16 per ounce. Silver fell more than 10% to US$67.21. (alg)
Source: Newsmaker.id
