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U.S. gold prices decline on geopolitical and economic developments

By Steve Fernandes

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U.S. gold prices have experienced a notable decline, falling from a recent high of $3,509 to $3,310. This $199 drop can be attributed to a combination of geopolitical and economic developments that have reduced market demand for safe-haven assets.

Key Factors Driving the Decline

  1. Stability in U.S. Monetary Policy
    Investor concerns over potential instability in U.S. monetary policy were mitigated following former President Donald Trump’s remarks reaffirming his support for Federal Reserve Chair Jerome Powell. By ruling out any intention to replace Powell, Trump contributed to a sense of continuity and stability in monetary leadership, reducing speculative demand for gold.
  2. Positive Signals in U.S.-China Trade Relations
    Sentiment was further boosted by optimistic statements from Trump regarding ongoing trade negotiations with China. His characterization of the discussions as “progressing positively” and his expressed confidence in achieving a mutually beneficial agreement have lowered immediate fears of trade disruptions, easing the flight to gold.
  3. Geopolitical Easing in Eastern Europe
    Russian President Vladimir Putin’s willingness to initiate talks with Ukrainian President Volodymyr Zelenskyy has raised hopes for a ceasefire agreement. This development has encouraged a shift in investor sentiment toward riskier assets, further weakening gold’s appeal as a safe haven.

Contrasting Forecast: Bullish Outlook from JP Morgan
Despite the current decline, JP Morgan has issued a bullish long-term outlook, projecting that gold prices could exceed $4,000 per ounce by Q2 2026. The forecast is driven by concerns over a potential U.S. recession and the impact of renewed trade tensions stemming from Trump-era tariffs.
The recent decline in gold prices underscores the complexity and volatility of today’s economic landscape. While current developments have encouraged a risk-on sentiment, longer-term forecasts suggest persistent uncertainty could reignite demand for gold. In a volatile, uncertain, complex, and ambiguous (VUCA) world, forecasting commodity movements remains inherently challenging.

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International News

Gold continues upward march;Bank of America forecasts  $5,000/oz for 2026

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Gold prices in India saw a modest rise on Wednesday today Oct 15, mirroring an uptick in international markets as renewed US-China trade tensions and expectations of further US interest rate cuts bolstered demand for safe-haven assets.24k gold traded at Rs.1,28,360/10gm after gaining ₹10 in early trade, while silver prices increased by Rs.100 to Rs.1,89,100 per kilogram.

Gold prices surged to a record high of $4,179.48 per ounce on October 14, 2025.  Investors flocked to safe-haven metals amid trade tensions and Fed rate-cut expectations. U.S. December gold futures jumped 57% year-to-date.  Bank of America raised its 2026 gold forecast to $5,000 per ounce, warning of possible near-term corrections.

Gold prices soared to an unprecedented $4,179.48 per ounce on October 14, 2025, marking a historic milestone for the yellow metal. The rally comes as investors worldwide seek safety in hard assets amid a turbulent global economic backdrop marked by escalating trade tensions, slowing growth, and expectations of further interest rate cuts by the U.S. Federal Reserve.

The sharp surge in bullion prices has been driven by a combination of macroeconomic uncertainty and aggressive monetary easing. As inflation pressures remain sticky and central banks pivot toward dovish policies, gold has reasserted its role as a hedge against both currency debasement and market volatility.

In futures trading, U.S. December gold contracts have skyrocketed nearly 57% so far this year, underscoring the strength of investor demand across both institutional and retail segments. Analysts note that central bank buying—particularly from emerging markets—has added further momentum to the rally, with several countries diversifying reserves away from the U.S. dollar.

Reflecting this bullish sentiment, Bank of America has raised its 2026 gold price forecast to $5,000 per ounce, citing continued monetary easing, geopolitical instability, and robust central bank accumulation. However, the bank also cautioned that short-term corrections are likely, given the rapid pace of the recent run-up and potential bouts of profit-taking.

Overall, gold’s meteoric rise underscores a broader shift toward safe-haven assets, as investors navigate a world increasingly defined by economic fragmentation, shifting interest rate cycles, and persistent geopolitical risks.

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