Gold prices held steady as global stock markets returned to normal after a big selloff on Monday. Spot gold prices remained largely unchanged after experiencing their largest one-day drop since early June, while other precious metals like platinum and palladium also stabilized on Tuesday following sharp declines.
The US dollar gained strength, and expectations for interest rate cuts by the Federal Reserve decreased, putting pressure on gold prices. Despite this, exchange-traded funds added 125,101 troy ounces of gold to their holdings during the last trading session.
The market chaos on Monday likely forced traders to sell some gold to cover losses on other investments. Gold prices fell as much as 3.2% before closing down 1.3% for the day.
However, gold hit an all-time high just a few weeks ago and has increased by more than 15% so far this year. Factors like potential Fed rate cuts and central bank purchases are helping to support gold prices.
Goldman Sachs analysts noted that holding gold in investment portfolios provides good protection against market shocks, such as wars, trade tariffs, and concerns about US debt. The bank still predicts that gold prices will reach $2,700 by 2025.
As of 11:19 a.m. in London, spot gold was priced at $2,414.32 an ounce. The Bloomberg Dollar Spot Index and US 10-year Treasury yields rose, while palladium dropped, platinum remained stable, and silver fell.
Source: Bloomberg
