Gold Prices are Expected to Decline Today by Multiple ReasonsThe key reasons include:
1. Profit-taking at high price levels: Technically, the price has failed to make a new high, prompting continued selling pressure. It hit 78.6% Fibonacci Retracement before a correction, making it possible for a bearish reversal.
2. Hopes for U.S.–China trade negotiations: Easing tensions between the U.S. and China have boosted investor confidence, reducing the demand for gold as a safe-haven asset.
3. Robust U.S. economic data: Strong U.S. employment figures indicate sustained economic growth, lessening the perceived need to hold gold as a hedge against economic risk.
4. A more hawkish Fed stance: Expectations that the Federal Reserve will not rush to cut interest rates in its fight against inflation have prompted investors to shift toward higher-yielding assets like government bonds instead of gold.
5. Rising bond yields and a weakening dollar: These conditions present investment opportunities that are likely to attract foreign capital, drawing funds away from gold.
Overall, these factors are contributing to downward pressure on gold prices today, as investors scale back demand for gold as a safe-haven investment.
Analysis by: Krisada Yoonaisil, Financial Markets Strategist at Exness
