Gold Prices Drop as Geopolitical Tensions Ease in Business News

Gold Prices Decline Amid Easing Geopolitical Tensions

In a surprising turn of events, the price of gold has faced its first weekly loss in six weeks. This decline comes as hopes for interest rate cuts by the Federal Reserve are delayed and geopolitical tensions in West Asia ease.

Investors have pulled back from the precious metal, leading to a more than 2% plunge in prices over the previous week. Market expert Ajay Kedia of Kedia Advisory attributes this shift to the Israel-Hamas peace negotiations in Cairo, which have raised hopes for a de-escalation of hostilities in the Middle East. This has increased investors’ demand for risky assets and shifted focus away from the safe-haven gold.

Looking ahead, Kedia predicts that gold prices may fall to $2290, with the MCX potentially touching 70500 levels. Market analysts suggest that despite recent gains in gold, a pullback was necessary due to the delay in interest rate cuts by the Federal Reserve, which has supported the dollar index and US treasury yields, putting downward pressure on gold prices.

China’s gold consumption has surged nearly 6% in the first quarter, while physical gold dealers in India have charged premiums for the first time in nearly two months. The report also indicates that domestically, gold is expected to trade within the range of Rs. 71,000-71,800 as market sentiments remain cautious amid evolving economic indicators.

Gold is currently trading at USD 2,346 per ounce, with a 7% surge in the month of April. Despite the recent decline, gold remains a valuable asset in times of turbulence, historically retaining or appreciating its underlying value.