Gold Prices Drop Sharply at the beginning of weekly trading

Gold prices experienced significant losses during trading on Monday, with the ounce losing about $49 in value, despite ongoing global geopolitical tensions and fears of the Russian-Ukrainian war expanding into a conflict between major global powers.

Performance of Spot and Futures Gold Contracts:

In terms of trading, futures gold prices fell by 1.79% or nearly $49 per ounce, trading close to $2667 per ounce. Similarly, spot gold prices declined by 1.59% or $43, trading near $2669 per ounce.

Why Did Gold Prices Fall Today?

Gold prices experienced significant losses due to profit-taking on the yellow metal, especially after the substantial gains made the previous week. Gold prices had crossed the $2700 threshold for the first time in over two weeks last Friday, achieving its largest weekly gain in nearly two years.

Additionally, gold prices suffered after comments from a member of the U.S. Federal Reserve, advising caution and the need for careful consideration in lowering interest rates during the upcoming bank meetings. In this context, Thomas Barkin, a member of the Federal Reserve Bank of Richmond, made remarks emphasizing the necessity for prudence in decision-making regarding monetary policy in the near future.

Barkin also stressed that it is too early to judge the December meeting, emphasizing that decisions regarding interest rate reductions should rely on the economic data available at that time, which negatively affected the yellow metal.

Furthermore, gold prices dropped as expectations strengthened for a slight reduction in U.S. interest rates during the upcoming December meeting, with expectations for a 25 basis point cut reaching 56.2%, while the expectation for keeping rates unchanged was at 43.8%, negatively impacting gold trading.

Other Metal Contracts:

Regarding other metal trading, silver futures contracts recorded a decline of 1.77%, settling close to $31.212, while platinum contracts fell by 1.43%, reaching approximately $958.85. Meanwhile, palladium contracts dropped by 0.39%, reaching about $1015.00 per ounce.

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