Gold prices fell on Monday as US Treasuries rose on expectations of rate hikes. The increased risk appetite with hopes for peace between Russia and Ukraine further weakened bullion’s safe-haven appeal.
Margaret Yang: This is a negative factor for gold
cryptocoin.com As we reported, the prospects for a diplomatic solution to end Russia’s occupation of Ukraine led to a generally positive mood in the stock markets and boosted investor confidence. This, in turn, increased risk appetite, reducing demand for traditional safe-haven assets and putting pressure on the precious metal. Spot gold was trading at $1,9762.85, down 1.25% at the time of writing. U.S. gold futures fell 0.85% to $1,968. DailyFX strategist Margaret Yang explains the reasons for the gold price movement as follows:
One of the main reasons is rising treasury interest rates. Also, the market seems to be pricing in Wednesday’s FOMC meeting as the Fed prepares to kick off the tightening cycle. So this is a negative factor for gold.
Benchmark US 10-year Treasury yields hit a one-month high as the US Federal Reserve is widely expected to raise rates by 0.25% at a two-day meeting later this week.
“Gold is unlikely to reach record highs in the short term”
The gold price is highly sensitive to rising US interest rates, which increases the opportunity cost of holding non-yielding bullion. Global stocks, which have stifled safe-haven demand for gold, rose on Monday in hopes of a respite from the Ukraine crisis, even as the conflict continues. Margaret Yang makes the following assessment, referring to the negotiations between Russia and Ukraine:
Given the fact that both sides are willing to talk, I think the worst of the Ukraine crisis is probably behind us. It is unlikely that the gold price will rise above the previous high of the past week or hit a record high anytime soon.
In addition to the FOMC meeting to be held later this week, Ukraine updates and headlines from China will also be important for a clearer gold price forecast.
Contact us to be instantly informed about the last minute developments. twitter‘in, Facebookin and InstagramFollow and Telegram and YouTube join our channel!
Disclaimer: The articles and articles on Kriptokoin.com do not constitute investment advice. Cryptokoin.com does not recommend buying or selling any cryptocurrencies or digital assets, nor is Kriptokoin.com an investment advisor. For this reason, Kriptokoin.com and the authors of the articles on the site cannot be held responsible for your investment decisions. Readers should do their own research before taking any action regarding the company, asset or service in this article.
Warning: Citing the news content of Kriptokoin.com and quoting by giving a link is subject to the permission of Kriptokoin.com. No content on the site can be copied, reproduced or published on any platform without permission. Legal action will be taken against those who use the code, design, text, graphics and all other content of Kriptokoin.com in violation of intellectual property law and relevant legislation.