Gold stabilizes today and heads to end the May sessions

Friday, May 31, 2024 - 20:21
Point Trader Group

Gold prices moved in a narrow range during trading on Friday, as the precious metal witnessed many factors that enhanced its stability in trading. However, gold is heading to achieve weekly and monthly profits for the fourth month in a row.

The stability of gold's movements came as a result of the yellow metal being exposed to downward and upward pressures at the same time. Below, the most prominent of these factors can be reviewed:

The geopolitical tensions that erupted in various regions of the world have increased the demand for gold as a safe haven. South Korea called on its North counterpart to stop the recent military provocations, warning of strong reactions that North Korea will not tolerate. This came in response to North Korea's launch of ballistic missiles and interference in air navigation by launching satellites, which threatens the outbreak of conflict on the Korean Peninsula.

Regarding the Russian-Ukrainian war, the Deputy Chairman of the Security Council of the Russian Federation warned of the possibility of NATO being involved in a direct confrontation with Russia, if the military alliance uses long-range weapons, and NATO’s continued support for Ukraine, which will increase tensions and undermine peace negotiations between Russia and Ukraine.

Gold prices were also exposed to downward pressure, during today’s trading, due to the rebound in benchmark 10-year US Treasury bond yields, recording about 4.559%, with an increase of 0.15%, as investors found that buying bonds is a better investment opportunity compared to owning gold.

At the same time, gold trading was affected by the recent statements of members of the US Federal Reserve, which generally stated that it is too early to think about lowering interest rates and that the labor market is still strong, which enhances inflationary pressures in the United States, which raised market expectations about not... The Federal Reserve’s rush to start the rate-cutting cycle, and that monetary policy will remain tight for some time, which negatively affected gold’s performance today.

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