Gold prices dropped by more than 1% in the international market as investors decided to book profits after recent gains. The fall also came as geopolitical-tensions showed signs of easing, reducing demand for safe-haven assets like gold.
In recent weeks, gold prices had moved up sharply due to global uncertainty and fears related to conflicts and economic slowdown. However, with no fresh escalation in global tensions, many traders chose to exit their positions and lock in profits.
Market experts say that when risk worries reduce, investors often shift money from gold to equities and other risk-based assets. This trend was clearly visible in today’s trading session.
At the same time, a slightly stronger US dollar and stable bond yields also put pressure on gold prices. Since gold is priced in dollars, a firm dollar makes the yellow metal expensive for overseas buyers.
In India, gold rates may see some volatility in the short term, but analysts believe long-term demand remains strong, especially due to wedding season buying and central bank purchases.
Spot gold was down 0.5% at $4,592.29 per ounce as of 07:39 p.m. after falling as low as $4,536.49 earlier in the session.
However, the metal is poised for its second consecutive weekly gain, of about 1.9%, after scaling a record peak of $4,642.72 on Wednesday.
U.S. gold futures for February delivery settled 0.6% lower at $4,595.40.
“It’s a general retreat in the commodity complex after weeks of aggressive gains, with some profit-taking. The de-escalation of Middle East tensions has also removed some of the geopolitical premium in gold and other metals, especially silver,”.
Geopolitical tensions appeared to ease as protests in Iran subsided, while U.S. President Donald Trump took a wait-and-see approach and Russia’s President Vladimir Putin moved to mediate in Iran and de-escalate the situation.
On the trade front, the U.S. and Taiwan struck a deal on Thursday that lowers tariffs on many of Taiwan’s semiconductor exports and channels new investments into U.S. tech, and risks infuriating China.
Meanwhile, the Federal Reserve is expected to keep rates unchanged through the first half of the year, with a first 25-basis-point cut projected in June, as per data compiled by LSEG.
Safe-haven gold tends to do well during times of geopolitical and economic uncertainty, as well as when interest rates are low.
“I still think we have a chance of getting to $5,000 sometime this year, punctuated with these big corrections in the meantime,” Meir said.
Spot silver shed 2.9% to $89.65 per ounce, although it was headed for a weekly gain of over 12% after hitting an all-time high of $93.57 in the previous session.
JP Morgan said in a note on Friday that mounting risks from loosening ex‑U.S. supply and ETF outflows to softer industrial demand and tighter Chinese trading curbs, leave silver vulnerable to a sharp correction.
Disclaimer
This article is intended for educational purposes only. The views and opinions expressed are those of individual analysts or brokerage firms and do not represent the views of GoldSilverReports.com. Investors are strongly advised to consult certified financial experts before making any investment or trading decisions.
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