Doha: Economic experts and analysts in the financial markets predict that gold prices will remain under pressure in the near future as markets await key economic data from the US that could influence future fiscal policy decisions, given the recent fluctuations in gold prices.

Speaking to Qatar News Agency (QNA), they pointed out that these fluctuations are due to multiple socio-economic factors. They stressed that reducing hedge funds’ allocations to gold is one of the major economic factors that has led to the recent price declines.

Gold prices have fallen sharply over the past two days, after rising more than 19 percent since the start of 2024 and around 13 percent in 2023. The pressure on prices is expected to continue in the coming period.

Globally, spot gold prices fell 0.3 percent to reach around USD 2,315.34 per ounce, while US gold futures fell 0.6 percent to USD 2,328.60. This follows a rise of USD 38.90 last Tuesday to close at USD 2,467.80 per ounce, while in Qatar, gold prices fell dramatically as the price of 24-carat gold per gram fell to almost SAR 281.87 on Friday, after hitting around SAR 287.72 on Wednesday.

Financial advisor Ramzi Qasimia told QNA that the recent drop in gold prices over the past two days was due to the US dollar regaining some of its strength after significant drops in gold prices. This comes with a higher likelihood of the Federal Reserve (the US central bank) cutting interest rates at its upcoming meeting scheduled for September.

He attributed the fall in gold prices to profit-taking activity, which has pushed gold prices down by around 3.5 to 4 percent over the past two days. This comes especially after prices hit record levels over the past week, highlighting the fact that investors are seeking safe havens for their investments, especially amid rising global inflation rates in most major economies.

The Vice Dean of the School of Business for Quality at Jordan’s Al Al-Bayt University, Dr. Omar Gharaibeh, attributed the sharp drop in gold prices yesterday, Friday, and the day before, Thursday, from USD 2,485 per ounce to below USD 2,400, by 3.4 percent, to the increase in US Treasury yields by around 1.7 percent to 1.9 percent on all terms, be it two years, 10 years, 20 years or 30 years, as the increase in Treasury yields contributed to the appreciation of the US dollar.

Financial analyst Ahmed Aql, for his part, stated that the sharp decline in many investment assets, such as oil, gold, some other metals and even financial markets, is due to several reasons. The main one is the technical failure that hit the global internet yesterday (Friday) and affected many economic institutions around the world. Also, many programs in the corporate sector were suspended. This put pressure on some investors who preferred to wait until the crisis was completely over.