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Friday, Aug 22, 2025

Five factors behind the recent decline in gold prices

Five factors behind the recent decline in gold prices

Gold prices fell during trading on Tuesday, in the worst daily decline since last March.
The spot price fell to US$1,935 an ounce during Tuesday’s trading, retreating from last week’s record of $2,072.50, while US gold futures fell 4.13 percent to $1,946.50 an ounce.

The strong collapse was attributed to several factors, which are as follows:

First, investors tried to take advantage of the record highs, and this attempt to reap profits increased the pace of decline during trading.

Second, the anticipated US stimulus package led to investor optimism, especially after press reports that showed the US Congress’s intention to resume talks about the anticipated stimulus package, meant to face the economic repercussions of the coronavirus.

Third, there was increasing optimism in markets due to the prospect of reaching a safe and effective vaccine for the coronavirus, especially after Russian President Vladimir Putin announced that Russia had produced a vaccine, thus becoming the first country in the world to officially announce one.

Fourth, President Donald Trump’s announcement that he wants to reduce taxes imposed on capital gains contributed to a decrease in demand for gold as a safe haven.

Fifth, economic data issued in China, Japan and other countries offered rising hopes for economic recovery.
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