Gold Declines Amid Dollar Rise and Escalating Global Tensions
Gold prices declined significantly on Tuesday after reaching their highest level in over three weeks, as the dollar rose, reducing the appeal of the precious metal for investors holding other currencies.
As of 01:25 GMT, the price of gold in spot transactions fell by 1.5% to $5150.38 per ounce, after hitting a record high earlier in the day.
U.S. gold futures for April delivery also dropped by 1.1% to $5170.70, according to Reuters.
This decline occurred despite ongoing geopolitical tensions and trade developments, as U.S. President Donald Trump warned countries against backing out of recent trade agreements, stating that he would impose much higher tariffs on violators, following the Supreme Court's cancellation of previous emergency tariffs.
In another statement, Federal Reserve member Christopher Waller clarified that the central bank is open to keeping interest rates unchanged at the March meeting, noting that February's job data will determine the market's stance, especially after a weak 2025.
The CME's "FedWatch" tool showed a likelihood of a 25 basis point rate cut three times this year.
The declines were not limited to gold; Asian markets also fell in early trading after Wall Street's drop last night, amid investor concerns over trade uncertainty and escalating tensions with Iran.
The U.S. State Department announced the withdrawal of non-essential staff and their families from the U.S. embassy in Beirut, amid fears of a military conflict with Iran.
Regarding other precious metals, the price of silver in spot transactions fell by 3.1% to $85.50 per ounce, after reaching its highest level in over two weeks.
Platinum dropped by 2.9% to $2092.31, and palladium fell by 2.1% to $1706.50 per ounce.
This event reflects a delicate balance between geopolitical tensions, U.S. monetary policies, and the rising dollar, making markets more sensitive to any economic or political moves in the coming weeks.
