International News

Gold declines and investors opt for dollar, prioritize liquidity

Published

12 months ago

April 8, 2025

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Gold, often considered the quintessential safe-haven asset, witnessed a notable retreat on Monday, slipping over 2% from last week’s record highs. This downturn came as investors, rattled by escalating trade tensions between the U.S. and China, shifted their focus towards the U.S. dollar and other safe-haven currencies like the Swiss Franc and Japanese Yen. The move reflects a broader market recalibration in the face of renewed economic and geopolitical uncertainties.

Spot gold prices fell by 2.4%, settling at $2,963.19 an ounce by early afternoon ET. During the session, the precious metal touched a near four-week low of $2,955.89. Meanwhile, U.S. gold futures also closed 2% lower at $2,973.60. This decline follows an all-time high of $3,167.57 reached just last Thursday, underscoring the volatility gripping the commodities market.

Investor sentiment shifted in favor of the U.S. dollar, which rebounded from a six-month low. A stronger dollar makes gold more expensive for holders of other currencies, putting downward pressure on its price. This change in preference indicates that, during times of acute uncertainty, investors may prioritize liquidity and ease of access — qualities traditionally associated with the dollar — over long-term value storage like gold.

The gold market is currently experiencing significant stress, largely driven by liquidity concerns and speculative activity. According to Bart Melek, head of commodity strategies at TD Securities, margin covering by traders — the need to cover losses on leveraged positions — has added to gold’s downward pressure. This phenomenon typically accelerates declines as investors sell assets to raise cash.

The primary catalyst for the market turmoil is the intensification of the U.S.-China trade conflict. President Donald Trump has floated the possibility of imposing a 50% tariff on Chinese imports if Beijing fails to roll back its own retaliatory tariffs. Meanwhile, speculation that the U.S. administration might pause tariffs for 90 days on all nations except China was dismissed by the White House as “fake news,” adding to the confusion and uncertainty.

Despite the short-term dip in gold, the broader macroeconomic backdrop continues to support a bullish outlook for the precious metal. Futures markets are now pricing in approximately 120 basis points of rate cuts from the U.S. Federal Reserve by the end of the year. The probability of a rate cut as early as May has also risen to 37%. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, thereby boosting their attractiveness.

Analysts remain optimistic about gold’s long-term potential. The metal continues to benefit from robust central bank demand and remains a favored hedge during periods of financial instability and geopolitical strain. The recent correction may be seen more as a pause or consolidation phase rather than a reversal of trend, particularly given the fragile state of the global economy.

Related Topics:2025 Gold Market nationalnews

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International News

World Gold Council to develop shared infrastructure for digital gold

The World Gold Council (WGC) today announced a pioneering initiative to build new market infrastructure designed to unlock the next era of digital gold’s development.

Published

2 hours ago

March 20, 2026

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WGC has co-authored a White paper titled Digital Gold: The Case for a Shared Infrastructure with Boston Consulting Group (BCG) which explores “Gold as a Service” – a new platform to support the issuance and operation of scalable, interoperable digital gold products.

Gold as a Service would act as an open platform, connecting the physical custody of gold with the digital systems used to issue and manage gold-backed products. By standardising essential market processes such as custody coordination, reconciliation, compliance and redemption, the model aims to reduce operational complexity, improve access and enable greater consistency across digital gold products.

Addressing the Structural Barriers to Digital Gold

The White paper acknowledges that gold has already undergone meaningful digitalisation, with trading, clearing and recordkeeping now largely electronic and a growing range of digital gold products such as tokens, now available. Yet despite these innovations, digital gold remains limited in scale largely due to structural constraints. Launching and operating digital gold products remains complex, with limited standardisation and reduced fungibility restricting its ability to integrate with modern financial systems.

Gold as a Service is proposed as a response to these challenges. Recognising the physical nature of gold, it is designed to modernise how gold integrates with an increasingly digital financial ecosystem, while preserving the asset’s foundational attributes that have underpinned its role and relevance for millennia.

Key Features of the Platform Would Include:

Seamless Product Issuance and Management: Standardised infrastructure and operating models would simplify the creation, issuance and ongoing management of digital gold products, reducing operational complexity.
Ease of Trade: By standardising processes, Gold as a Service aims to increase digital gold’s fungibility, allowing it to function as a single asset with consistent value and legal rights across the ecosystem.
Embedded Trust and Assurance: Continuous reconciliation, audit and assurance would be built into shared infrastructure, strengthening confidence in digital gold by supporting consistent proof of physical backing and clearly defined ownership and redemption frameworks.

Interoperability by Design: Shared infrastructure would enable digital gold products to integrate more easily with existing financial market infrastructure and emerging digital rails, improving mobility across platforms, venues and use cases.
Broader Utility: As fungibility and liquidity improve, digital gold could extend beyond its traditional role as a diversifier and store of value. Gold can become deployable capital, enabling new use cases like pledging gold as collateral for borrowing.

David Tait, Chief Executive Officer, World Gold Council commented:

“Financial services are undergoing a rapid and pervasive digital transformation and gold must also evolve to maintain its role in the global financial system. Gold as a Service is the latest step in the World Gold Council’s digital gold innovation programme, designed to strengthen trust, transparency and market efficiency. Shared infrastructure can help gold become more accessible, more easily traded and fully integrated into modern financial systems — ensuring it remains as relevant tomorrow as it has been for millennia.”

Matthias Tauber, Managing Director and Senior Partner, BCG added:

“The question is no longer whether gold will be digital, it’s how it can participate in modern financial systems without compromising physical integrity. Together with the World Gold Council, we explored what it takes to build trusted rails for digital gold, at market scale.”

The World Gold Council is calling for innovators and market participants from inside and outside the gold industry to convene, challenge and contribute to the development of this shared infrastructure that the WGC will build.