The secret behind the drop in global gold prices
The current decline in global gold prices (with the metal trading near $4,125 per ounce) is attributed to the gap between long-term buying by central banks and the pressure from fast trading in financial markets. The main reasons are:
• Rising U.S. Treasury yields: U.S. Treasury yields have climbed to high levels (approaching 5.30%), drawing liquidity toward income-generating assets and weighing on gold, which does not generate a yield.
• Strength of the U.S. dollar: The dollar index has risen to higher levels, making the precious metal more expensive for buyers and investors outside the United States.
• U.S. Federal Reserve policy: Expectations of keeping interest rates high for longer to rein in the “stubborn” inflation drive funds to liquidate part of their gold positions.
• A contrast between the “two layers”: Central banks (such as China and Poland) continue to buy gold in practice (over the long term), while there are waves of quick, momentary selling in futures contracts and investment funds (COMEX and ETFs).
• Profit-taking: Some investors are turning to profit-taking after the previous upward waves recorded by the yellow metal.
#XAUTSignal #BinanceHerYerde
The current decline in global gold prices (with the metal trading near $4,125 per ounce) is attributed to the gap between long-term buying by central banks and the pressure from fast trading in financial markets. The main reasons are:
• Rising U.S. Treasury yields: U.S. Treasury yields have climbed to high levels (approaching 5.30%), drawing liquidity toward income-generating assets and weighing on gold, which does not generate a yield.
• Strength of the U.S. dollar: The dollar index has risen to higher levels, making the precious metal more expensive for buyers and investors outside the United States.
• U.S. Federal Reserve policy: Expectations of keeping interest rates high for longer to rein in the “stubborn” inflation drive funds to liquidate part of their gold positions.
• A contrast between the “two layers”: Central banks (such as China and Poland) continue to buy gold in practice (over the long term), while there are waves of quick, momentary selling in futures contracts and investment funds (COMEX and ETFs).
• Profit-taking: Some investors are turning to profit-taking after the previous upward waves recorded by the yellow metal.
#XAUTSignal #BinanceHerYerde