International News
U.S. gold prices decline on geopolitical and economic developments
By Steve Fernandes
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
- 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. - 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. - 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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Precious Metals Bounce Back As Iran Ceasefire Hopes Rise, But Fed Rate Fears Loom: AUGMONT BULLION REPORT
Gold Remains Under Short-term Pressure from Expectations of Fed Tightening and a Strong Dollar. However, Investor Positioning in Gold Looks Relatively Light After Months of ETF Outflows.
Price Movement – Gold has bounced back from its key support levels near $3960, and Silver has recovered from $55, after an Iranian official reportedly received a proposal for a 10-day ceasefire. The continuing US-Iran standoff has kept investors worried about energy-driven inflation and the possibility of further rate hikes. Markets are now pricing in an 83% chance of a US rate hike in December, up sharply from 73% just a week earlier, based on the CME FedWatch tool.
Geopolitical Tensions – Despite the Houthis announcing fresh military action, both Tehran and Washington appear keen to restart talks and stop the escalating attacks that have nearly destroyed a fragile interim agreement reached last month. A senior Iranian official told Reuters on Monday that mediators had proposed a 10-day ceasefire, aimed at rescuing the interim deal and eventually leading to a lasting peace agreement.
Macro-Economic Signals – Gold remains under short-term pressure from expectations of Fed tightening and a strong dollar. However, investor positioning in gold looks relatively light after months of ETF outflows, meaning further price drops may be limited. Strong physical demand, especially from China, along with continued central bank buying, is providing solid support to the gold market.
Technical Triggers
If Gold fails to hold above $4,000 (~Rs.1,41,000), it could slide further to $3,900 (~Rs.1,38,000). But if it manages to stay above $4,200, a fresh rally could take it toward $4,500 (~Rs.1,55,000).
For Silver, a strong move above $63 (~Rs.2,35,000) could push prices toward $70–71 (~Rs.2,51,000–2,55,000). On the other hand, a fall below $55 (~Rs.2,14,000) may drag it down to $50 (~Rs.2,00,000).
Support and Resistance
| International Gold Support Level International Gold Resistance Level Domestic Gold Support Level Domestic Gold Resistance Level | : $3900/oz : $4160/oz : Rs 137,000/10 gm : Rs 147,000/10 gm |
| International Silver Support Level International Silver Resistance Level Domestic Silver Support Level Domestic Silver Resistance Level | : $55/oz : $63/oz : Rs 214,000/kg : Rs 235,000/kg |
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