Gold prices fell more than 1% on Tuesday, making it ten days in a row that they have gone down. A strong US dollar and fading hopes for interest rate cuts from the Federal Reserve in the near future are to blame.
As of 02:27 GMT, spot gold fell 1.6% to $4,335.18 an ounce.
On Monday, the metal hit its lowest point since November 24.
April gold prices in the US dropped 1.6% to $4,336.10.
As the dollar got stronger, gold priced in dollars became more expensive for people who hold other currencies.
As interest rates continued to rise because of fears that the war in Iran would cause prices to rise, prices went down. “Gold has been going down because of the fear that global central banks will become more “hawkish” as a result,” said Ilya Spivak, head of global macro at Tastylive.
Since the US and Israel’s war on Iran began on February 28, spot gold prices have dropped about 18%. The dollar has become one of the best safe havens during this time.
On Monday, Iran denied having talks with the US after President Trump put off a threat to bomb Iran’s power grid, saying that he had been in positive talks with unnamed Iranian officials.
Reuters talked to two sources in Pakistan and one said that direct talks to end the war could happen in Islamabad as soon as this week.
After Tehran said it hadn’t talked about ending the Middle East war with Washington, oil prices stayed above $100 a barrel.
Costs of transportation and making things tend to go up when gas prices go up, which makes inflation worse.
Rising inflation usually makes gold more appealing as a hedge, but high interest rates make people less interested in the asset that doesn’t earn any interest.
According to CME Group’s FedWatch, buyers cut their odds on a December Fed rate hike from just above 25% the day before to about 13%.
Spivak said that the critical levels for gold are $4,275 and $4,000. The levels of resistance are $4,650 and $4,840.
Silver dropped 2.9% of its value and now costs $67.11 an ounce.
Silver fell 2.1% to $1,403.76 and platinum fell 2.1% to $1,842.30.
