Gold Prices Dip Amid Stronger Dollar and Geopolitical Shifts
Gold prices edged lower on Monday, pressured by a strengthening US dollar following comments from President-elect Donald Trump, who warned BRICS nations against forming a new currency.
The rising dollar has made gold more expensive for holders of other currencies, further dampening demand.
Spot gold traded at $2,635 an ounce in early Asian hours, after falling nearly 3% the previous week. As of 9:13 a.m. in Singapore, the metal was down 0.4% to $2,632.11, while the Bloomberg Dollar Spot Index rose 0.3%. Other precious metals, including silver, platinum, and palladium, also recorded declines.
Last week’s losses in gold were largely driven by reduced demand for safe-haven assets following a US-brokered ceasefire between Israel and Hezbollah.
However, lingering concerns over the escalation of Russia’s war in Ukraine continue to support gold’s appeal as a protective investment.
Looking ahead, market participants are anticipating the release of US nonfarm payroll figures later this week, which could influence the Federal Reserve’s interest rate decision on December 18. Historically, lower borrowing costs benefit gold as it is a non-yielding asset.
Gold has risen approximately 30% in 2024, bolstered by the US Federal Reserve’s monetary easing policies, significant central-bank purchases, and heightened geopolitical and economic uncertainties.
Analysts from Goldman Sachs Group and UBS Group AG have projected record highs for gold in 2025, citing continued support from these factors.
The recent dip, coupled with strong dollar dynamics and geopolitical developments, highlights the volatile yet resilient nature of the precious metal market.
