The gold price has recorded its sharpest weekly fall in more than four decades, despite ongoing global tensions linked to the conflict involving Iran.
Gold dropped 11 percent over the week, marking its biggest decline since 1983. The metal has also fallen more than 14 percent since the conflict began.
Market analysts say the drop is largely driven by expectations around interest rates.
Traders now believe the US Federal Reserve will hold rates steady for the rest of the year, making income-generating investments such as bonds more attractive than gold, which does not provide returns.
A stronger US dollar has also weighed on the gold price as the dollar index has risen nearly two per cent since the conflict began, making gold more expensive for international buyers.
Recent gains in gold may also be easing after a strong rally, as it surged in recent years and reached a record high of 5,000 US dollars per ounce earlier this year, before slipping below 4,500 this week.
“Upward momentum has faded,” strategists at Dutch bank ING said in a note.
“Some investors are selling gold to raise cash or rebalance portfolios.”
Despite the recent decline, some analysts remain optimistic about gold’s long-term outlook, citing ongoing geopolitical uncertainty and inflation concerns.
