Gold Records Worst Monthly Performance in 17 Years
Gold Records Worst Monthly Performance in 17 Years as Hopes for U.S. Rate Cuts Fade
Gold prices are set to record their worst monthly performance in 17 years, amid declining investor expectations regarding U.S. interest rate cuts this year.
Prices rose slightly today, but they have lost about 14% since the beginning of the month, under pressure from a rising dollar and energy prices.
Slight Increase in Gold Prices Amid Weak Dollar
The price of gold in spot transactions rose by 0.8% to reach $4544.19 per ounce by 01:14 GMT, while U.S. gold futures for April delivery increased by 0.3% to $4573.20 per ounce.
This comes as the dollar weakened, making dollar-denominated commodities less expensive for holders of other currencies, according to a report by "Reuters".
Gold Loses About 14% Since the Beginning of the Month
Gold has seen its largest monthly decline since October 2008, losing approximately 14% since the start of the current month, although prices rose by 5% during this quarter.
Analysts attribute this decline to the strength of the dollar and rising energy prices, which diminish hopes for interest rate cuts.
Investors Rule Out Any U.S. Rate Cuts
Traders widely ruled out any possibility of the Federal Reserve (U.S. central bank) cutting interest rates this year, amid the threat of rising energy prices increasing inflation.
Expectations before the outbreak of the war in the Middle East indicated a possibility of two interest rate cuts during the year.
Record Oil Prices Increase Pressure on Markets
Oil prices continued to rise to record levels, marking their largest monthly gains ever, influenced by the escalation of conflict in the Middle East and supply concerns.
U.S. President Donald Trump warned of targeting Iranian power stations if the Strait of Hormuz is not opened, while Iran described U.S. peace proposals as "unrealistic" and launched waves of missiles at Israel.
Jerome Powell's Statements on the War's Impact on the Economy
Federal Reserve Chairman Jerome Powell stated that the central bank can wait to assess the impact of the war with Iran on the economy and inflation, noting that policymakers typically ignore shocks resulting from rising oil prices.
Performance of Other Precious Metals
Other precious metals showed mixed movements, with the price of silver in spot transactions rising by 1.2% to $70.81 per ounce, platinum increasing by 0.1% to $1901.95, while palladium rose by 1.1% to $1421.45 per ounce.
