Asia’s gold rush is starting to lose some of its lustre, as surging oil prices due to the Iran war dampen rate-cut hopes that recently helped fuel one of the metal’s strongest rallies in years.
A surge in energy costs has revived inflation concerns and made central banks less likely to cut rates, and this has made interest-bearing assets more attractive, according to analysts.
Gold prices fell by 12 per cent from US$5,247.90 per troy ounce on February 27 to US$4,620 on Friday morning.
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The metal is typically seen as an attractive long-term investment and a safe-haven asset in times of economic and geopolitical uncertainties.
On January 28, gold prices reached an all-time high at US$$5,602. It rose 65 per cent from US$2,624 on January 2 last year to US$4,339.65 on December 31, according to KITCO, a precious metals information provider.
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Oil prices remained elevated, with Brent crude futures for July rising by almost one per cent to US$111.41 per barrel on Friday. The benchmark has risen for four straight months, with its June contract that expired on Thursday surging to US$126.41 a barrel, the highest since March 2022.