Gold prices stabilised on Monday (26 October), hovering around US$4,000 an ounce after falling below that level last week and losing more than 4% over the week. US$4,000 is equivalent to about S$5,113.
Gold was down 0.2% at US$3,987.45 at 8.37am on Monday, its lowest level in nearly three months. Gold prices fell 4% last week, also marking the biggest single-day decline since June.
US Treasury yields fell below 5% and the US dollar index slipped to around 101.5. Both would normally support gold prices, but the metal still fell sharply, pointing to selling to raise cash.
Gold fell below US$4,000 last week, mainly as major economies tightened monetary policy to combat inflation and funds flowed from artificial intelligence-related stocks into the bond market. Investors sold gold to cover their stock market losses.
Gold prices have fallen about 25% since conflict broke out between the US and Iran in February this year.
Earlier weakness in gold prices was mainly driven by energy prices, stubborn inflation and expectations of interest rate increases by the US Federal Reserve. Markets are currently pricing in a 10% chance of a rate increase following this week's meeting.
US President Donald J. Trump told Fox News he would soon decide whether to reach a deal with Iran or resume strikes, prompting a slight pullback in oil prices.
As of 10.25am on Monday, gold was trading at US$3,993.41 an ounce, down 0.01%.
