Gold dips as Lunar New Year holiday mutes markets

Gold extended its decline, slipping further below the $5,000-an-ounce mark in subdued trading conditions as much of Asia remained closed for the Lunar New Year and US markets were shut Monday for a holiday.

Bullion dropped as much as 1.4% on Tuesday, after losing 1% in the previous session, News.Az reports, citing Bloomberg.

The metal had briefly rallied on Friday following modest US inflation data that strengthened expectations the Federal Reserve could move to cut interest rates. Lower borrowing costs typically benefit non-yielding assets such as gold.

A surge of speculative buying drove gold to a record high above $5,595 an ounce in late January, pushing a multiyear rally to new peaks. However, a sharp two-day selloff at the start of the month dragged prices down to around $4,400. Since then, gold has recovered roughly half of those losses, though trading has remained volatile.

Several major banks — including BNP Paribas SA, Deutsche Bank AG and Goldman Sachs Group Inc. — continue to project a resumption of the metal’s upward trajectory. Analysts cite ongoing geopolitical tensions, concerns about the Federal Reserve’s independence, and a broader investor shift away from currencies and sovereign bonds as factors likely to sustain support for gold.

In the short term, however, analysts warn of increased downside risks if prices remain below the $5,000 threshold. As of 10:25 a.m. in Singapore, spot gold was down 0.5% at $4,967.82 an ounce. Silver fell 0.4% to $76.30 an ounce, platinum was little changed, and palladium declined 1.1%. The Bloomberg Dollar Spot Index was flat after closing 0.1% higher in the previous session.

News.Az 

By Nijat Babayev