Gold Falls Below US$4,100
Gold prices weakened again, falling below US$4,100 per troy ounce in recent trading. This pressure emerged after a sell-off in technology stocks on Wall Street prompted investors to reduce their gold holdings to cover losses in other assets. This situation demonstrates that gold does not always immediately strengthen when the market is in panic.
Spot gold fell to around US$4,083.77 per troy ounce in the morning Singapore time, after previously weakening 1.7% and recording its lowest close in two weeks. At the time of writing, gold prices were trading around US$4,102 oz. Silver also fell 1.1% to US$60.86 per ounce, while platinum and palladium weakened. This weakening indicates widespread pressure in the precious metals market.
This gold sell-off was largely driven by investors' need for liquidity. When the stock market fell sharply, particularly due to pressure in the technology sector, some investors sold gold to raise cash. In other words, gold, usually considered a safe haven asset, can actually be under pressure when the market experiences a major selloff across assets.
Pressure on gold also comes from the strengthening US dollar. The dollar index rose 0.4%, making dollar-priced gold more expensive for buyers using other currencies. At the same time, US government bonds also strengthened, reflecting a flight to safer assets, but still putting pressure on gold as the market continues to consider the direction of interest rates.
The technology sector is a major driver of market volatility. Concerns that the AI-driven stock rally has gone too far have led investors to reduce positions in riskier stocks. This pressure has spread to Asian markets, intensifying negative sentiment toward riskier assets and adding to the pressure on gold.
In addition to technology stocks, gold is also still overshadowed by expectations that the Federal Reserve could raise interest rates. The hawkish tone of Fed Chairman Kevin Warsh has caused investors to reconsider the risks of inflation and tighter monetary policy. This situation reduces gold's appeal because the precious metal offers no yield, despite previously receiving support from the interim peace agreement between the United States and Iran. (asd)*
Source: Newsmaker.id
