Summary
- International gold prices fell to as low as $5,021.59 per troy ounce, below $5,100.
- It said the carrying cost of precious metals such as gold has increased due to a stronger dollar and concerns over rising U.S. Treasury yields.
- It noted that gold’s gains over the past 12 months were based on expectations of easier U.S. interest rates, but that inflation concerns have lowered expectations for additional rate cuts.
Forecast Trend Report by Period
International gold prices have slipped back below $5,100 per troy ounce. Analysts point to the stronger U.S. dollar and rising inflation concerns.
On the 9th (local time), spot gold for June delivery on the New York Mercantile Exchange (COMEX) fell to as low as $5,021.59 per troy ounce. Gold futures had climbed above $5,400 per troy ounce on May 2 in the wake of U.S. and Israeli airstrikes on Iran, but have since turned lower and are trading below $5,100.
Gold is considered a flagship safe-haven asset. Even as the Iran war has increased uncertainty, some analysts say gold’s weakness reflects a stronger dollar and concerns over higher U.S. Treasury yields. The dollar index, which measures the greenback against a basket of six major currencies, rose to 98.99 the previous day—its highest level in three months. For holders of currencies other than the dollar, the cost of buying gold has increased. In addition, as U.S. Treasury yields rise, the carrying cost of non-yielding precious metals has increased.
Reuters said that “a large part of gold’s gains over the past 12 months was based on expectations of easier U.S. interest rates,” adding that “with oil prices topping $100 a barrel and stoking inflation concerns, expectations for additional rate cuts have diminished.”
Reporter Kim Dong-hyun 3code@hankyung.com
Korea Economic Daily
hankyung@bloomingbit.ioThe Korea Economic Daily Global is a digital media where latest news on Korean companies, industries, and financial markets.
