Gold’s Slippery Slide: Why the Bull Fell for the Third Day
Yesterday, the precious metal that’s been called “the king of safe‑havens” took a few steps back, dropping for the third straight day. Prices kicked off the day at $2,331.40 per ounce, and the rough trade‑off was all about the U.S. dollar rising thanks to a bump in Treasury yields.
Why the Fed Got a Bit Chilled
- Inflation stubbornly stuck around, which knocked the Fed’s hopes for an immediate rate cut out of the crystal ball.
- Now, market watchers expect only 27 basis points of easing by year‑end.
- A recent U.S. Dollar Index dip of 0.18% saw the dollar climb back over the 105 mark, making gold—an asset with no yield—feel the heat.
- Fed minutes revealed that some members are ready to hike rates, further tightening the monetary climate.
Central Banks and Sanctions: The Gold Boost That Shrunk
Gold had been riding high on international central‑bank purchases—a cocktail fueled by Western sanctions on Russia after its Ukraine invasion. But the new data was a real strike in the drawer that carried gold’s price down from last Monday’s all‑time high, smashing a critical trendline on the chart.
Can Gold Bounce Back Today?
Despite the dollar’s strength, there are small glimmers of hope that gold might claw back some of those losses:
- Geopolitical tensions in the Middle East could contribute to a short‑term surge in safe‑haven demand.
- Fed side‑kick Waller’s remarks today might send ripples—hawkish comments often put downward pressure on gold.
- Also on the docket: U.S. durable goods orders and the Michigan Consumer Sentiment Index might add more market flavor.
More on the Gold Pedal: China and the PBoC
Remember the private sector boom in China? They imported 543 tons of gold in Q1 2024. Meanwhile, the People’s Bank of China added another 189 tons to its reserves—an extra lift that helped keep prices high earlier in the year.
Keep Your Eye on the Future
Gold’s next move? It’s a mixed bag—potential for recovery but also pressure from rising rates and a cooling Fed outlook. Stay tuned, folks; this investment story could flip faster than a ballerina on a slick stage!
