Gold and Silver Prices Decline Today What Are the Reasons? And What Are the Future Prospects?
Precious metals markets witnessed sharp declines in gold and silver prices today, Friday. Gold fell by about 6% to reach $5,120 per ounce, while silver dropped by more than 10% to around $105 per ounce.
This decline comes after gold reached its highest level in history on Thursday at $5,598 per ounce, while silver also reached unprecedented record highs.
Reasons for the Decline in Gold and Silver Today
Profit-Taking:
After the historic rise in precious metals this month, many investors resorted to profit-taking, which put downward pressure on prices.
US Dollar Rebound:
The US dollar rebounded against major currencies, reducing the appeal of gold as an investment alternative, as the relationship between the two is usually inverse.
Rumors of Tighter Monetary Policy:
Markets circulated rumors about the potential appointment of Kevin Warsh as Chairman of the Federal Reserve. These speculations have led to expectations of a less accommodative monetary policy, driving investors toward the dollar at the expense of gold and silver.
Background to the Historic Rise
Despite today's sharp decline, gold is still on track for its strongest monthly gain since 1982, while silver is poised for its best monthly performance ever. This exceptional performance is attributed to:
- Ongoing geopolitical tensions around the world
- Global economic concerns
- Investors' flight to safe havens
Future Gold and Silver Price Outlook
Analysts expect price volatility to continue in the coming period due to several factors:
- US monetary policy developments: The market will remain focused on any news regarding the appointment of a new Federal Reserve chair and its impact on interest rates.
- US dollar movements: Its strong influence on precious metals trends will continue.
- Geopolitical factors: Any escalation in global tensions could restore gold's appeal as a safe haven.
- Support levels: Traders will be watching the $5,000 level for an ounce of gold and also the $100 level for silver as key support that can be relied upon before returning to the uptrend and continuing the overall upward trend again.
