Gold Prices register further decline
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Gold's decline continued unabated on Monday, marking the sixth consecutive session of losses and bringing the precious metal to a nearly seven-month low. This downward trend was primarily driven by the strength of the U.S. dollar and the growing anticipation of higher interest rates in the United States, both of which dimmed the appeal of gold as an investment.
As of 9:54 a.m. EDT (1354 GMT), spot gold had dropped by 0.8% to reach $1,835.40 per ounce, a level not seen since March 10. Simultaneously, U.S. gold futures also saw a decline of 0.7%, settling at $1,853.00. The consensus among market experts is that this decline is largely attributed to the prevailing sentiment that interest rates in the U.S. will remain elevated for an extended period, which has cast a bearish shadow over the precious metal market. Some analysts even predict that gold prices could dip below the $1,800 mark in the short term.
Jim Wyckoff, a senior analyst at Kitco Metals, echoed this sentiment by stating, "There is a reckoning that interest rates are going to be higher for much longer, which has been the bearish element in the precious market. Gold prices could go below $1,800 in the near-term."
Additionally, he pointed out that currency market trends tend to be robust and enduring, suggesting that the appreciation of the U.S. dollar may persist, further exerting downward pressure on the gold market. In fact, the U.S. dollar index rose by 0.4% during this period, making gold less appealing to investors holding other currencies.
In summary, the continuous decline in gold prices, extending for the sixth consecutive session, can be attributed to the strength of the U.S. dollar and the expectations of higher interest rates in the United States. These factors have diminished the allure of gold as an investment, with spot gold hitting its lowest level in nearly seven months at $1,835.40 per ounce. Analysts, such as Jim Wyckoff from Kitco Metals, believe that the bearish sentiment surrounding gold may persist, potentially leading to prices falling below the $1,800 mark in the near term. The appreciation of the U.S. dollar, as reflected by a 0.4% increase in the U.S. dollar index, has further contributed to gold's recent struggles in the market.
