The reasons why gold and silver have fallen sharply amid the crisis in the Middle East
Gold and silver prices registered a sharp fall this Thursday, a situation that has surprised the market and investors, amid the intensification of the conflict in the Middle East. It should be noted that the Middle East, also known as the Near East, is made up of the countries comprising the Arabian Peninsula such as Cyprus, Egypt, Iraq, Iran, Israel, Jordan, Lebanon, the Palestinian territories, Syria, and Turkey.
TL;DR
- Gold prices fell by approximately 2% in the spot market and futures lost around 3.8%.
- Silver prices dropped over 5% in spot and 7% in futures.
- The decline is occurring amid high global market risk aversion and falls in stock markets and debt.
- Investors are monitoring the conflict between the US and Israel against Iran.
- Gold and silver are not fulfilling their role as safe-haven assets, according to Julius Baer.
- Factors weakening precious metal prices include a stronger dollar, rising US debt yields, and anticipated less expansive Fed policy.
- Macroeconomic factors are offsetting any positive impact from the Middle East war.
- Those who bet on precious metals due to potential dollar depreciation have been on the wrong side of the market since the conflict began.