• Daily market updates

• #Commodities

The most important reasons for the decline in gold

Gold prices witnessed a significant decline on Wednesday, May 14, 2025, with the price of an ounce falling to around $3,183, after reaching record levels exceeding $3,500 last April. This decline is attributed to several economic and geopolitical factors that have affected the precious metal's appeal as a safe haven.

Declining Demand for Safe Havens The easing of trade tensions between the United States and China, after the two countries agreed to reduce tariffs for 90 days, contributed to reducing the safe-haven appeal of gold. This improvement in trade relations encouraged investors to shift towards riskier assets, pressuring gold prices. US Inflation Data The Consumer Price Index (CPI) for April showed a 0.2% increase, below expectations of 0.3%. This slowdown in inflation dampened expectations of a rapid interest rate cut by the Federal Reserve, negatively impacting gold's appeal.

Improved risk appetite in markets

With the improvement in global stock indices and the decline in economic concerns, investors' risk appetite has increased, prompting them to move away from gold and toward higher-yielding assets.

Future Outlook:

Despite the current decline, gold retains its long-term appeal, especially amid ongoing geopolitical tensions and economic uncertainty. Some analysts expect gold to stabilize above the $3,200 per ounce support level, with the possibility of a rebound in the event of negative economic data or an escalation of global tensions.

It is important for investors to closely monitor economic and geopolitical developments, as any changes could significantly impact gold price movements in the coming period.