Gold and Silver Tumble as Rate-Hike Fears Hit Precious Metals
Silver dropped more than 5% and gold fell as traders priced in higher interest rates and weaker investment demand, analysts said.
- On Tuesday, spot gold sank 1.9% to just above $4,111 an ounce, while silver futures tumbled over 5% to $61.80. The declines followed a global sell-off in tech stocks stoked by fears of higher interest rates.
- Federal Reserve officials signaled growing support for interest rate hikes, with Chairman Kevin Warsh vowing to restore price stability. A firmer dollar and fading hopes for near-term rate cuts continued to weigh on metals.
- Deutsche Bank lowered gold price forecasts by 22%, writing that "hawks are driving out bulls" in the market. Goldman Sachs Group Inc. slashed its year-end forecast by $500 to $4,900 an ounce, seeing no rate cuts this year.
- Bullion is now seen at $4,300 an ounce in the third quarter and $4,800 in the final three months, down 17% from prior outlooks. However, three to four Federal Reserve hikes could drive prices as low as about $3,800.
- While the U.S.-Iran war initially boosted prices, "the one pillar which remains strong is central bank demand," analysts said. Yet continued sales from gold-backed exchange-traded funds show that usual support for the metal remains "notably absent.
13 Articles
13 Articles
At the beginning of the year, the gold price had still set a record of 5595 dollars. Now, fear of rising interest rates is weighing on the prospects for the precious metal.
The Myth of Gold as an Anti-Inflation Shield: Why the Value of Precious Metal Drops when Prices Rise
Gold is heading for the fourth consecutive monthly decline, although US inflation reaches a peak of the last three years. Here's why gold prices are now dictated by interest, not inflation, writes...
Gold and silver prices fell on Tuesday (June 23), dragged down by a decline in global technology stocks; earlier, concerns about interest rate hikes had also triggered market panic.
Gold and silver are falling sharply today, with silver leading the decline at a pace several times greater than gold. A report by Barchar argues that the easing of Iranian-American tensions is not the reason. The war is winding down, an agreement has been signed, and oil flows have resumed. However, none of this is the cause of the metals' decline, and the remaining uncertainties in the Iranian situation don't change the overall picture, as all …
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