Continued Decline in Gold Prices: In recent sessions, gold prices have significantly declined,
reflecting solid impacts from the rising US dollar and US Treasury yields.
This decline comes at a crucial time before the release of core inflation data,
which may provide necessary signals about the Federal Reserve’s interest rate plans.
This article reviews the main reasons behind this decline in gold prices and the current market impacts,
highlighting the economic factors influencing and guiding future prices.
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Gold prices fell for the second consecutive session on Thursday due to the rising US dollar
and Treasury yields ahead of the release of core inflation data,
which could provide further clarity on the Federal Reserve’s interest rate plans.
The US dollar surpassed the 105-point level, reducing the appeal of gold-priced
in the US currency for holders of other currencies.
At the same time, benchmark 10-year US Treasury yields remained
near their highest levels in several weeks, achieved in the previous session.
Despite gold bullion being a hedge against inflation,
rising interest rates increase the opportunity cost of holding non-yielding assets.
The dollar index has been recovering, and Federal Reserve policymakers have been very hawkish recently,
with Treasury yields continuing to rise.
Continued Decline in Gold Prices