On 17th February, gold dropped over 2 percent, with indications of progress in the U.S.-Iran negotiations dampening the demand for safe haven, and a stronger U.S. dollar contributing to the selling pressure.
Spot gold dropped 2.2% to $4,884.46 per ounce at 01.30 p.m. ET (1830 GMT). The April gold futures in the U.S. closed 2.8% down to $4,905.90.
The U.S dollar index gained 0.3 per cent against a group of currencies, which increased the cost of bullion priced in the currency among foreign buyers.
“Bull markets should have fresh fundamental fodder on a regular basis, and in the case of the gold and silver markets, fresh bullish fundamental news has been lacking of late to push prices even higher,” according to Jim Wyckoff, senior analyst at Kitco Metals.
Knowledge about guiding principles
“Tuesday, Iran and the U.S. agreed on the broad lines of their negotiations to end their nuclear conflict, which had lasted long, and that is not a reason to expect that a deal is soon at hand,” Iranian Foreign Minister Abbas Araqchi said.
The Ukrainian and Russian negotiators also met in Geneva during peace talks, which were moderated by the U.S. over two days.
Wyckoff told us that the negotiations emphasised the bad side of gold and silver.
“In case the U.S. can afford not to attack Iran, market jitters would subside and that would be adverse to safe-haven gold and silver, and so would be the same with the Russia-Ukraine negotiations,” he added.
The investors are also awaiting the January Federal Reserve minutes, which are expected on Wednesday, and the U.S. Personal Consumption expenditures report, which is expected on Friday, to give them an indication of the interest-rate perspective of the central bank. The expectation of the first rate cut of the year is in June.
Non-yielding gold is usually effective in the low-interest-rate atmosphere.
Tuesday saw many Asian markets closed up due to the Lunar New Year holidays, such as mainland China, Hong Kong, Taiwan, South Korea and Singapore.
Spot silver lost 4.1% to trade at $73.47 per ounce, compared to the lows of 71.92 during the day.
Spot platinum fell 1.3% to $2,017.06 per ounce, and palladium fell 3.1%to $1,670.25.
