For the past two to three days the price of gold was declining. The reason for this must be the easing geopolitical tensions. Recently even Iran announced that they donot have the plan to attack back Israel for their drone attack, according to a news report.
Reasons for decline in price of gold:
Even when the US Dollar was getting stronger we witnessed a surge in gold price. Usually this doesn't happen. But since there was a war, investors found gold to be safe haven asset and shifted their investments [not fully] into gold from shares in order to protect their money against market crash. Along with this, the Central Bank buying of gold was also a reason for the surge in gold price.
Another major reason for this decline is, expectations of delayed rate cuts by Fed Reserve. Many expect the rate cuts to happen by September. Even Fed also hinted about no plans for rate cuts in June it seems.
Position of gold price ahead:
According to experts, now the gold price has corrected and they donot expect any end to this bull run in gold price. They just consider it as a mild correction. Further, they expect the trajectory of the gold price might be influenced by US Dollar, interest rates and political stability.
Also read:
1. Is it necessary to hold gold stocks in your portfolio?
2. Ways to invest in gold effectively.
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