The price of gold fell sharply on Friday, reaching its lowest level in more than two years. In afternoon trading, the price of a troy ounce (31.1 grams) of the precious metal fell about $27 to $1,644 (about $1,660).
Market observers explained the downturn just before the weekend with a sharp rise in interest rates in the capital markets, making fixed income more attractive to investors than investing in gold.
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The price had previously hit its lowest level since April 2020 at $1,641. At the same time that the gold price plummeted, government bond market yields rose sharply.
“Given the rapid rise in interest rates, gold as an interest-free investment cannot score points at the moment,” said Commerzbank’s commodities experts on the current market development. The sharp rise in capital market interest rates was caused by the latest interest rate hikes by leading central banks.
Source: Krone
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