🚀 AI-picked stocks soar in May. PRFT is +55%—in just 16 days! Don’t miss June’s top picks.Unlock full list

Gold prices slide, close to breaking below $2,300 as safe haven demand wanes

Published 23/04/2024, 03:12 pm
© Reuters

Investing.com-- Gold prices fell in Asian trade on Tuesday, extending overnight losses as easing concerns over geopolitical tensions in the Middle East sapped the yellow metal of safe haven demand.

This trade also left gold more vulnerable to recent strength in the dollar, while the prospect of higher-for-longer U.S. interest rates presented more price pressures for bullion.

Spot gold slid 0.9% to $2,305.14 an ounce, while gold futures expiring in June fell 1.1% to $2,319.70 an ounce by 00:45 ET (04:45 GMT). Spot prices were now trading well below a record high of around $2,430 an ounce hit earlier in April.

Easing M.East tensions, rate outlook pressure gold prices 

Growing hopes that the conflict between Iran and Israel will not escalate further saw traders begin to price out risk premiums from commodity prices.

Gold had been a key beneficiary of increased safe haven demand over the past two weeks, after Iran and Israel both carried out strikes against each other. But after Israel’s latest attack on Iran, reports suggested that Tehran was not seeking immediate retaliation.

This potential de-escalation sapped away at safe haven demand for gold. 

Easing safe haven demand also made gold more vulnerable to the higher-for-longer outlook on U.S. interest rates, especially after hawkish Federal Reserve signals and sticky inflation readings over the past two weeks. 

Higher rates bode poorly for gold, given that they increase the opportunity cost of investing in the yellow metal.

Focus this week is on PCE price index data- the Fed’s preferred inflation gauge- for more cues on rates.

Other precious metals also sank on Tuesday. Platinum futures fell 0.9% to $922.35 an ounce, while silver futures slid 0.8% to $27.017 an ounce.

Broader metal prices were also pressured by resilience in the dollar, which remained close to over five-month highs.

Copper, aluminum prices slide from recent highs 

Among industrial metals, copper prices slid from near two-year highs on Tuesday after top producer Chile said it will increase production at state-run miner Codelco this year. 

Three-month copper futures on the London Metal Exchange fell 1.2% to $9,749.50 a ton, while one-month copper futures fell 1.1% to $4.4343 a pound. Both contracts slid from near two-year highs. 

Chiles’s outlook largely offset recent expectations that global copper supplies will tighten amid stricter U.S. sanctions on Russian metal exports. This notion had been a key driver of copper price gains over the past month.

Aluminum prices were also caught in the selling frenzy in industrial metals, and sank 1% from recent 15-month peaks. 


Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.