Slightly firmer dollar and optimism over a potential truce dampens investor demand for safe-haven assets
20 May 2025 - 07:36
byAnushree Mukherjee
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Bengaluru — Gold prices eased on Tuesday, as a slightly firmer dollar and optimism over a potential ceasefire between Russia and Ukraine dampened investor demand for safe-haven assets.
Spot gold was down 0.5% at $3,213.35/oz by 4.27am GMT. US gold futures slipped 0.6% to $3,215.50.
The dollar slightly recovered after touching a more than one-week low in the previous session, making greenback-priced gold less appealing to holders of other currencies.
“We are seeing the knee-jerk response to the US credit downgrade wear off and there’s some hope of a truce between Ukraine and Russia,” Capital.com financial market analyst Kyle Rodda said.
US President Donald Trump spoke with President Vladimir Putin on Monday and said Russia and Ukraine would immediately start negotiations towards a ceasefire.
“We are seeing buyers emerge on dips below $3,200. However, I think we are due a bigger pullback, especially if there’s further easing in geopolitical risks and we see upward pressure on yields building from US fiscal policy.” Rodda said.
Gold, which is considered a safe asset amid geopolitical and economic uncertainties, has hit multiple record highs this year and is up about 22% so far this year.
US Federal Reserve officials on Monday took on cautiously the ramifications of the latest downgrade of the US government’s credit rating and unsettled market conditions as they continued to navigate a very uncertain economic environment.
Moody’s cut the US’s rating to Aa1 from Aaa on Friday, citing rising debt and interest “that are significantly higher than similarly rated sovereigns”.
Several Fed officials are scheduled to speak later in the day, potentially providing further insights into the economy and the central bank’s policy path.
Markets are now pricing in at least 54 basis points of rate cuts this year, with the first reduction expected to begin in October.
Spot silver fell 0.6% to $32.17/oz, platinum was steady at $998.04 and palladium lost 0.3% to $971.84.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Gold slips on possible Russia-Ukraine ceasefire
Slightly firmer dollar and optimism over a potential truce dampens investor demand for safe-haven assets
Bengaluru — Gold prices eased on Tuesday, as a slightly firmer dollar and optimism over a potential ceasefire between Russia and Ukraine dampened investor demand for safe-haven assets.
Spot gold was down 0.5% at $3,213.35/oz by 4.27am GMT. US gold futures slipped 0.6% to $3,215.50.
The dollar slightly recovered after touching a more than one-week low in the previous session, making greenback-priced gold less appealing to holders of other currencies.
“We are seeing the knee-jerk response to the US credit downgrade wear off and there’s some hope of a truce between Ukraine and Russia,” Capital.com financial market analyst Kyle Rodda said.
US President Donald Trump spoke with President Vladimir Putin on Monday and said Russia and Ukraine would immediately start negotiations towards a ceasefire.
“We are seeing buyers emerge on dips below $3,200. However, I think we are due a bigger pullback, especially if there’s further easing in geopolitical risks and we see upward pressure on yields building from US fiscal policy.” Rodda said.
Gold, which is considered a safe asset amid geopolitical and economic uncertainties, has hit multiple record highs this year and is up about 22% so far this year.
US Federal Reserve officials on Monday took on cautiously the ramifications of the latest downgrade of the US government’s credit rating and unsettled market conditions as they continued to navigate a very uncertain economic environment.
Moody’s cut the US’s rating to Aa1 from Aaa on Friday, citing rising debt and interest “that are significantly higher than similarly rated sovereigns”.
Several Fed officials are scheduled to speak later in the day, potentially providing further insights into the economy and the central bank’s policy path.
Markets are now pricing in at least 54 basis points of rate cuts this year, with the first reduction expected to begin in October.
Spot silver fell 0.6% to $32.17/oz, platinum was steady at $998.04 and palladium lost 0.3% to $971.84.
Reuters
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.