Gold declines as high interest rates dampen appeal
Global gold prices fell for the second consecutive day after reaching a record high, pressured by rising US Treasury yields and Federal Reserve Chairperson Jerome Powell’s hawkish stance on interest rates. Investors now await key US inflation data for further direction.
Gold dropped 0.3% to a session low of $2,883 per ounce on Wednesday before recovering slightly to trade at $2,890. This follows Tuesday’s record high of $2,942 per ounce, after which gold slid 0.4% to close at $2,897, according to Gold Bullion.
Fed Chair Powell, speaking before Congress, reaffirmed the Fed’s cautious approach, emphasizing that rate cuts are not imminent unless inflation eases or the labor market weakens. His remarks drove US Treasury yields higher, with the 10-year bond yield surpassing 4.5%, further pressuring gold prices.
Gold is often seen as a hedge against inflation and market uncertainty, but rising interest rates diminish its attractiveness by increasing the opportunity cost of holding the metal. Additionally, profit-taking after gold’s record surge has added to selling pressure.
Investors are now focused on upcoming US inflation data, as a stronger-than-expected core Consumer Price Index (CPI) could influence the Fed’s rate decisions and impact gold’s trajectory.
Meanwhile, geopolitical tensions and trade concerns continue to shape gold’s outlook. Safe-haven demand has been supported by escalating US trade tariffs and renewed uncertainty over Middle East conflicts, particularly following recent statements by former President Donald Trump.
In Egypt, gold prices fluctuated in response to the rising USD/EGP exchange rate, which provided some support against the global downtrend. The price of 21k gold opened at EGP 4,075 per gram, trading at EGP 4,070 at the time of writing, after falling EGP 15 on Tuesday to close at EGP 4,065.
The post Gold declines as high interest rates dampen appeal appeared first on Dailynewsegypt.