en.Wedoany.com Reported - Pressured by a sharp rebound in the US Dollar Index, gold prices on the New York futures market tumbled sharply on Thursday, falling below the $4,700 per ounce mark for the first time in a week.
The stronger dollar eroded the purchasing power of holders of other currencies, while US Treasury yields continued to climb this week, creating a double headwind for gold. Additionally, high crude oil prices intensified inflation concerns, and three consecutive higher-than-expected US inflation readings delayed expectations for Federal Reserve rate cuts, further weakening gold's upward momentum.
Since the outbreak of the Russia-Ukraine conflict in late February, gold prices have cumulatively fallen nearly 12%. Traders are betting that central banks will be forced to maintain high interest rates to curb the inflationary impact of rising energy prices, which is bearish for the non-yielding precious metal.
The market remains skeptical about the prospects of a US-Iran agreement, an expectation that reinforces the view that interest rates will stay higher for longer. As previously noted, higher interest rates diminish gold's appeal, as the metal itself generates no yield.
On the Chicago Mercantile Exchange (Comex), the most active gold contract fell 1.08% to settle at $4,656.00 per ounce, marking its lowest close since May 6. Dragged down by the recent downturn, gold's year-to-date cumulative gain narrowed to 7.0%.
Despite its recent weak performance, gold prices have still surged 46% over the past 12 months, following an 11% plunge in March.
It is worth noting that on March 2, gold prices briefly surpassed the $5,400 mark in electronic trading for the first time, exceeding the intraday record of $5,362.40 set on January 29. Since then, gold's luster has gradually faded due to the prospect of sustained tight monetary policy in the US and crude oil prices breaking above $100.
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