Apr 25, 2024 (MENAFN via COMTEX) --
(MENAFN) On Wednesday, gold prices experienced a third consecutive session of decline, attributed in part to hedge funds scaling back their allocations to the precious metal. This reduction comes amidst diminishing concerns regarding a significant escalation of the crisis in the Middle East. Gold in instant transactions fell by 0.3 percent to USD2,315.34 per ounce by 1153 GMT, following a previous session where it reached its lowest levels since April 5. Similarly, US gold futures declined by 0.6 percent to USD2,328.60.
Analysts, such as Giovanni Stonovo from UBS Bank, pointed to hedge funds' decreased appetite for gold as a contributing factor to the decline in prices. Stonovo highlighted that tensions in the Middle East have somewhat subsided in recent days, prompting investors to reassess their positions in the precious metal.
The resurgence of the US dollar and an uptick in standard Treasury bond yields further weighed on gold prices. The strengthening dollar, coupled with higher bond yields, rendered gold less attractive to investors holding other currencies, thereby dampening its appeal as an investment option compared to debt instruments.
Investor focus has now shifted towards key US economic data releases, particularly the GDP data scheduled for release on Thursday and the personal consumption spending report slated for Friday. These reports are anticipated to provide fresh insights into the trajectory of US Federal Reserve interest rates, thereby influencing investor sentiment towards gold and other assets.
In terms of other precious metals, silver prices fell by 0.6 percent to USD27.11 per ounce in spot transactions, while platinum rose by 0.3 percent to USD909.91. Meanwhile, palladium experienced a marginal decline of 0.1 percent, reaching USD1,018.09 per ounce.
Overall, gold prices faced downward pressure amidst reduced hedge fund allocations and easing tensions in the Middle East, with investor attention now turning to upcoming economic indicators for further market direction.
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