Gold Price Falling: Root Cause Analysis and Future Outlook

Post on: 30.05.2025

The price of Gold has fallen significantly, falling to around $3,220 a day ounce in the late morning of 1° May 2025, marking the highest level of low from mid April. This decline follows a series of three consecutive days of decline, moving further away from the all-time high of $3,500 reached on April 22.

Factors influencing the decline in the price of the gold

The recent decline in the price of gold è attributable to several macroeconomic and geopolitical factors:

• Easing Trade Tensions: U.S. President Donald Trump's statements regarding potential trade deals with India, South Korea and Japan have helped reduce concerns about trade wars, decreasing the attractiveness of the gold as a safe-haven asset.

• US Dollar Strengthening: The dollar index rose 0.4% against major currencies, making the gold more expensive for foreign buyers and negatively affecting demand.

• Waiting for Demand Data U.S. Employment: Investors are awaiting the U.S. Nonfarm Payrolls Report, due on Friday, which could provide guidance on the Federal Reserve's future monetary policy.

Impact on Precious Metals Markets

The Decline in the Price of Precious Metals rsquo; Gold has also had an impact on other precious metals:

• Silver: The price of silver è descended from the 1.5%, standing at $32.10 a year ounce.

• Platinum: Platinum has experienced a decrease in 1%, reaching $957.33 a day ounce.

• Palladium: In contrast to other metals, palladium saw a slight increase of 0.2%, rising to $939.74 a year oz.

Future outlook for the price of gold

Despite the recent decline, the long-term outlook for the price of gold Gold remain positive:

• Analyst forecasts: Goldman Sachs revised its forecast upwards, estimating that the price of gold Gold could reach $3,700 per ounce by the end of 2025, supported by higher demand from central banks and inflows into ETF funds.

• Accommodative Monetary Policies: The possibility of further interest rate cuts by the Federal Reserve could make the gold more attractive as an investment, favoring an increase in demand.

• Geopolitical uncertainties: Any geopolitical tensions or instabilities; economic measures could increase the risk aversion of investors, pushing them towards assets considered safe such as gold.

Final Thoughts

The recent decline in the price of Gold reflects a temporary decrease in demand due to macroeconomic and geopolitical factors. However, long-term forecasts point to a possible recovery, supported by accommodative monetary policies, institutional demand and potential global uncertainties. Investors should closely monitor economic and geopolitical developments to assess opportunities. investment in the Gold