Gold prices tumble 12% as energy-driven inflation concerns dampen safe-haven appeal
Analysts say central banks less likely to cut rates after energy cost surge, making interest-bearing assets more attractive
L'essentiel
- Gold prices fell 12% from US$5,247.90 to US$4,620 per troy ounce as energy cost-driven inflation concerns reduced expectations for central bank rate cuts, making interest-bearing assets more attractive.
- Oil prices remained elevated with Brent crude futures for July rising to US$111.41 per barrel, while the June contract expired at US$126.41, the highest since March 2022.
Résumé généré par IA
Pourquoi c'est important
Gold typically serves as a safe-haven asset during economic and geopolitical uncertainties, but rising energy costs have revived inflation concerns, making interest-bearing assets more attractive relative to non-yielding commodities like gold.
A surge in energy costs has revived inflation concerns and made central banks less likely to cut rates, and this has made interest-bearing assets more attractive, according to analysts. Gold prices fell by 12 per cent from US$5,247.90 per troy ounce on February 27 to US$4,620 on Friday morning. The metal is typically seen as an attractive long-term investment and a safe-haven asset in times of economic and geopolitical uncertainties. On January 28, gold prices reached an all-time high at US$$5,602. It rose 65 per cent from US$2,624 on January 2 last year to US$4,339.65 on December 31, according to KITCO, a precious metals information provider. Oil prices remained elevated, with Brent crude futures for July rising by almost one per cent to US$111.41 per barrel on Friday. The benchmark has risen for four straight months, with its June contract that expired on Thursday surging to US$126.41 a barrel, the highest since March 2022.
Questions ouvertes
- How long will energy-driven inflation persist?
- Will central banks actually maintain rates or pivot to cuts?
- What is the geopolitical situation affecting oil prices?
