The Unexpected Drop in Gold Prices: Diving Below $2,400/ounce

The gold price witnessed a decline of over 2% from its previous day's close, dipping below the $2,400 per ounce mark.

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Gold prices in the US market unexpectedly dropped during Friday’s trading session (July 19). At 9:30 PM Vietnam time, gold spot prices in the US market had fallen over 2%, dipping below the $2,400/ounce mark. Prior to this, gold prices had reached an all-time high of $2,483.60/ounce on Wednesday (July 17).

Source: Kitco.com

According to Reuters, the strengthening US dollar and rising US Treasury bond yields exerted pressure on gold prices.

“In addition to profit-taking, gold prices fell due to market predictions of a potential soft landing for the US economy – which could pressure gold as investors shift from safe-haven investments to riskier assets,” said Alex Ebkarian, executive director at Allegiance Gold.

Earlier this week, Fed Chair Jerome Powell stated that recent inflation data “raised the likelihood” that price increases were on a sustainable path back to the central bank’s target.

Additionally, Kitco also cited analysts’ views that the gold sell-off was partly due to concerns about a weakening Chinese economy in the coming months, which could reduce demand for raw materials, including gold and other metals.

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