Gold Prices Ease Amid Higher Yields and Strong Dollar: What It Means for Your Investments in Oman
Gold prices dipped on Thursday, pressured by rising U.S. Treasury yields and a stronger dollar, although hopes for a resolution to the U.S.-Iran conflict helped limit the decline.
As of 0611 GMT, spot gold was down 0.3% to $4,528.03 per ounce. The metal had rebounded over 1% on Wednesday, recovering from a drop to its lowest level since March 30 earlier in the day. Meanwhile, U.S. gold futures for June delivery slipped 0.1% to $4,528.90. The U.S. dollar increased by 0.1%, making gold more expensive for buyers using other currencies.
ANZ analyst Soni Kumari noted that “inflation expectations, rising yields, and a stronger dollar are the key headwinds keeping gold under pressure. These factors will persist until there is clarity on the duration of the conflict.”
Since the onset of the conflict in late February, gold has dropped more than 14%, reflecting its sensitivity to expectations of higher interest rates given that it does not yield interest. Iran is reportedly reviewing Washington’s recent stance on ending the conflict, following U.S. President Donald Trump’s indication that he was willing to wait a few days for “the right answers” from Tehran.
Market watchers are increasingly anticipating tighter U.S. monetary policy in 2024, with a 39% probability of a 25 basis-point rate hike in December, according to the CME Group’s FedWatch tool.
Kelvin Wong, a senior market analyst at OANDA, explained that “the medium-term uptrend in the 10-year U.S. Treasury yield since early March suggests gold bulls may be cautious about pushing prices higher at this time.” He added that gold is likely to remain weak in the near term, with resistance expected around $4,645 and support near $4,456 per ounce.
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The recent dip in gold prices, driven by higher U.S. Treasury yields and a stronger dollar amid geopolitical tensions, signals a challenging environment for gold investments in Oman. Businesses and investors should be cautious as rising interest rates and currency fluctuations may limit gold’s appeal as a safe haven assetينبغي على المستثمرين الأذكياء أن يأخذوا في الاعتبار diversifying portfolios to mitigate risks associated with prolonged geopolitical uncertainty and tightening monetary policies.
