The price of gold is falling sharply today, losing more than eight percent in the morning and falling below $5,000 per troy ounce (oz; 31.1 grams). According to analysts, one of the main reasons is speculation that a candidate who is not so inclined to rapidly reduce base interest rates could take the helm of the US Federal Reserve (Fed). The prices of silver, platinum, and palladium are also falling significantly.
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Gold weakens sharply after reaching record high
The price of gold for immediate delivery was down about 8% before 11:00 CET, hovering around $4,958, according to Reuters. On Thursday, it rose to a record high of $5,594.82 per ounce. For the month as a whole, the price of gold is up about 15%.
Despite today’s decline, January has been an exceptionally strong month for gold, and for the month as a whole, gold could still show its highest growth since 1999. Interest in gold is mainly supported by continuing geopolitical and economic uncertainties, which are increasing demand for safe assets, including gold.
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Gold, silver, and platinum are falling, investors are nervous about news from the Fed
Investors are reacting to reports that US President Donald Trump is likely to announce the successor to current Fed Chairman Jerome Powell today. The name of former Fed Governor Kevin Warsh is being mentioned more and more often. The decline in prices was also contributed to by the strengthening of the US dollar, which recovered from multi-year lows. A stronger dollar increases the price of gold for foreign buyers, thereby reducing their interest in gold.
The prices of other precious metals are also falling sharply. The price of silver fell by more than 17 percent to $95.80 per ounce, after reaching a record high of $121.64 per ounce on Thursday. Since the beginning of January, silver has gained around 42 percent and is heading for record monthly growth. The price of platinum has lost 16 percent, while the price of palladium has fallen by more than 13 percent.
Source: Reuters
