Contents
Gold prices have experienced their second consecutive quarterly decline, extending losses that began in August and continued through September. This week marked the worst drop in over two years, with the most-active gold futures contract on New York’s Comex, December, settling at $1,866.10 an ounce, down $12.50 or 0.7% for the day.
Largest Weekly Decline Since 2021
The benchmark for U.S. gold futures recorded a 4% decline for the week, its most significant weekly drop since June 11, 2021, when it plummeted nearly 6%. Over the third quarter, Comex gold saw a 3% drop, following 2% declines in August and 5% in September, which offset July’s gain of 4%. In the second quarter, gold futures fell by almost 4%.
Spot Price of Gold
The spot price of gold, closely monitored by traders, was $1,850.20 by 14:00 ET (18:00 GMT), compared to the previous session’s settlement of $1,864.56. Just a week ago, spot gold settled at $1,924.99, while at the end of June, it stood at $1,919.57.
Read More: Boeing Resolves US Claim Regarding Osprey Production Issues
Challenges Faced by Gold
Notably, gold lost its grip on the crucial bullish level of $1,900 an ounce in September, which it had held since mid-August. This shift occurred as some investors found the U.S. dollar, considered a better safe-haven asset, due to the relatively superior economic growth of the United States compared to the rest of the world.
Impact of Bond Yields and the Dollar
Additionally, gold faced negative pressure from a selloff in U.S. bonds, driving the dollar higher as investors pursued higher yields. Bond yields, linked to the 10-year U.S. Treasury note, remained just below 4.58 on Friday, following a 16-year high of nearly 4.69 on Thursday.
The Dollar’s Influence
The Dollar Index stubbornly held at around 106, further weighing on gold, after reaching a 10-month high of 106.84 on Wednesday. This occurred despite the latest inflation data, which raised hopes that the Federal Reserve might delay its interest rate hike. The Fed last met on September 20, keeping rates unchanged but hinting at a possible increase in November or December.
Uncertainty Continues
Gold failed to attract safe-haven demand, even as the U.S. government faced a looming shutdown due to Republican delays in funding public agencies. The precious metal’s future remains uncertain amid these economic and market dynamics.
Disclaimer: Please note that this article serves solely for informational purposes and should not be construed as financial advice. We strongly advise readers to conduct thorough research and consult with financial professionals before making any investment decisions.
