Gold prices have fallen to their lowest level in four years, pressured by a strengthening US dollar and growing anticipation of higher interest rates. The spot price of gold dipped to $1,131.85 an ounce, marking a significant decline from its recent trading range.

Factors Contributing to the Decline

Several factors have contributed to the downward pressure on gold prices:

• Stronger US Dollar: A rising dollar makes gold more expensive for international buyers, dampening demand.
• Rising Interest Rates: Expectations that the Federal Reserve will soon raise interest rates have reduced the appeal of gold, which offers no yield.
• Reduced Safe-Haven Demand: With global economic concerns easing, investors are less inclined to seek the safety of gold.
• Increased ETF Outflows: Holdings in gold-backed exchange-traded funds (ETFs) have been declining, further weighing on prices.

Market Outlook

Analysts predict continued volatility in the gold market, with prices potentially falling further if the dollar continues to strengthen and interest rates rise. However, some believe that gold could find support at lower levels as physical demand from Asia increases.

Expert Commentary

“The combination of a stronger dollar and rising interest rate expectations is a potent headwind for gold,” said a senior market strategist at a leading investment bank. “We expect gold to remain under pressure in the near term.”