Gold price partially reverses previous week's significant gains – Commerzbank
|The Gold price lost more than 3% on Monday and fell to $2,620 per troy ounce, Commerzbank’s commodity analyst Carsten Fritsch notes.
Gold is not completely immune to current developments
“This was triggered by news of a possible agreement on a ceasefire between Israel and the Hezbollah militia in Lebanon, which could reduce demand for Gold as a safe haven. Last week, Gold recorded its strongest weekly gain since March 2023 due to the escalation in the Ukraine war, rising by 6% and topping the $2,700 mark for the first time in a fortnight on Friday.”
“In doing so, Gold was also able to defy the appreciation of the US dollar and a further reduction in the Fed's interest rate cut expectations. According to Fed Funds Futures, an interest rate cut of 25 basis points in December is now only a good 50% priced in and an interest rate cut of 25 basis points at one of the two upcoming meetings, i.e. by the end of January, is not even fully priced in.”
“The sharp price decline yesterday showed that Gold is not completely immune to these developments once the support from geopolitical tensions diminishes somewhat."
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