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

Published 04/23/2024, 01:08 AM
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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.

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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

wow gold all foll God pless😇🙏🙏
Gold futures now erasing losses as the king of metals bounces back for another leg up. Chartists are dancing in the street about the latest sell-off which completes the final pattern required before a real blast-off in prices. Silver promises more as it has been depressed relative to gold and the charts have far more upside room.
The only gold being sold is the paper gold traded on the forex exchanges. Sovereign wealth funds and central banks are gobbling up gold like their lives depend on it. Unfortunately, the paper market sets the spot price. That won’t last forever, though.
Gold appears to be in a correction move down to US$2000. Too much hype from the get rich quick brigade. Gold is nothing more. than another commodity being used as a fear tool. Gold price moves up and down as any other commodity. Gold is not the solution to our planets fantasy financial system of artificial growth concept. The over population of our planet is seeking to become rich by gambling on the stock market. Gold is one gambling instrument. Gold is just another commodity cycling downwards.
You see it all backwards. Gold has stable value since it was first discovered. It's our planets fantasy financial system that is wobbly.
The real safe haven is Dax... she pumps will all is down
selling papergold...and buying usd in order to avoid, with all the printing for the weapons...a fall of usd. how does it sounds ?
it sounds bass awkwards.
so, central banks don t like when gold sky rocket
Not when they're buying
remember that gold is the barometer of trust in the system.
Sure. just like the horizon is a barometer how drunk you are. If you see it wobble violently - it means you're wasted.
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