The stronger US dollar is putting pressure on gold prices, while investors are waiting for important US inflation data for more clues on monetary policy from the US Federal Reserve (Fed).
CNBC reported that at 1:50 p.m. ET on February 28 (1:50 a.m. 1:00 a.m. Vietnam time) spot gold prices fell 1.1% to $2,885.13/ounce, after hitting their lowest level since February 12 in the trading session on February 28.
Previously, on February 24, the world gold price reached a record high of 2,956.15 USD/ounce thanks to safe-haven cash flow.
US gold futures closed down 1.2%, down to $2,895.9/ounce.
Overall last week, gold lost 2.5% after 8 consecutive weeks of increase but still increased 2.2% in February.
The reason for the decline in gold prices, according to CNBC, is because the stronger USD makes gold more expensive. The USD index is expected to increase by 0.7% this week.
Market strategist Yeap Jun Rong said that gold is still a safe haven, but profit-taking activities along with the strength of the USD are putting pressure on the price of this precious metal.
The next factor that caused gold prices to decrease was the impact of tariffs and inflation data.
US President Donald Trump has just announced a 25% tariff on goods from Mexico and Canada, along with an additional 10% tax on imports from China, effective from March 4. This has boosted the US dollar and put pressure on gold prices.
Investors are also watching the Personal Consumption Expenditures (PCE) index - the Fed's preferred inflation measure.
Philadelphia Fed President Patrick Harker has supported keeping rates around 4.25-4.50%, reducing expectations of rate cuts that could support gold.
Rahul Kalantri - Vice President of Commodities at Mehta Equities - said that gold could not maintain its upward momentum due to the influence of a strong USD and concerns about tariffs.
Investors will continue to monitor the USD and the Fed's monetary policy decisions to forecast gold prices in the coming time.
