Gold suffers worst weekly drop in 3 years

With gold futures contracts declining by 0.2% to $2567.10, the market is facing increasing pressure due to the strength of the US dollar, amid growing expectations of smaller US interest rate cuts, according to Reuters.

Sharp decline in gold prices

At the beginning of the week, gold prices fell significantly, with spot gold contracts dropping to $2562.61 per ounce, marking a decline of more than 4% since the beginning of the week. This decline reflects the impact of several factors, most notably the strength of the US dollar, which has made gold more expensive for holders of other currencies.

Impact of the dollar’s strength on gold

Analysts indicate that the strength of the US dollar was the main factor behind the decline in gold prices. When the dollar rises, as reported by Reuters, gold becomes more expensive for investors using other currencies, leading to a decrease in demand for the yellow metal.