Gold prices fall amidst stronger U.S. dollar

In Short:
– Gold prices fell further due to a strong U.S. dollar and high Treasury yields.
– Investor sentiment is shifting amid market volatility and uncertain economic indicators.

Gold extended its decline on Tuesday, remaining in a bear market as investors unwind positions.The stronger U.S. dollar and high Treasury yields have diminished gold’s attractiveness.

Gold prices drop

Spot gold prices decreased 2% but later reduced losses to 1%, trading at $4,335.97 per ounce.

Gold futures for April delivery fell over 1% to $4,358.80 per ounce.

Spot silver dropped more than 3% to $66.93 per ounce, while futures were down 2.61% at $67.54.

The dollar index, measuring the greenback’s strength against a basket of currencies, rose 0.5% on Tuesday.

A stronger dollar makes dollar-priced bullion more expensive for non-U.S. currency holders.

Spot gold has lost over 22% from its record high of $5,594.82 per ounce at January’s end.

The metal experienced nearly a 10% loss last week, marking its worst performance since September 2011.

The dollar index strengthened around 3% since the onset of the war.

Market analysts linked the decline to macroeconomic factors and strategic position adjustments.

Rajat Bhattacharya, senior investment specialist at Standard Chartered, noted that gold initially rose due to safe-haven demand at the conflict’s outset.

He explained that investors tend to raise cash for margin calls or realise profits during market stress, affecting gold.

The recent dollar strength has also negatively impacted gold demand.