June 2, 2023

Dubai Week

Complete Dubai News World

Gold is falling due to rising dollar

Gold prices recorded a sharp decline on Friday, after hitting their highest level in more than a year in the previous session, after a strong dollar and indications of the need to raise interest rates. Again rates.
Spot gold was down 2.1 percent at $1,996.09 an ounce by 12:03 a.m. EDT. U.S. gold futures were down 2.2 percent at $2,009.80.
The dollar index rebounded from a one-year low and Treasury yields rose after a senior U.S. central bank official warned of the need for the bank to continue raising interest rates to control inflation.
Gold competes with the dollar as a safe haven amid economic or political turmoil, while a rise in the U.S. currency leads to reduced demand for the precious metal from buyers holding other currencies.
Daniel Pavillonis, chief market strategist at RJO Futures, said the metals market is likely to slide on expectations of a 25 basis point hike in interest rates from the US Federal Reserve in May.
“Prices will stabilize around the $2,000 level,” he added.
However, prospects for the precious metal remain positive after its substantial gains over the past two sessions, amid growing fears of a recession that could push the US Federal Reserve to end the rate hike cycle.
“I still expect prices to hit record highs and continue to climb toward $2,100,” said Philip Stribel, chief market strategist at Blue Line Futures in Chicago.
Among other precious metals, spot silver fell 2.1 percent to $25.25 an ounce, after hitting a one-year high of $26.07 in the previous session, posting a fifth straight week of gains.
Platinum fell 0.7% to $1,040.07 and palladium rose 0.9% to $1,512.88, with both metals on track for weekly gains.

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