The stronger US dollar and profit-taking pressure caused gold prices to fall more than $60, falling below the $4,000 an ounce mark.
At the end of the trading session on October 9, the world spot gold price decreased by nearly 65 USD, to 3,975 USD per ounce. In the morning session on October 10, the price has increased to 3,990 USD.
The market fell as the US dollar rose and investors took profits after prices broke the $4,000 mark in the previous session. On October 8, the precious metal hit a new record of $4,059 an ounce. News of a ceasefire agreement between Israel and Hamas also caused demand for shelter to drop.
World gold prices increased sharply in the session of October 9, then decreased sharply. Chart: Kitco
The Dollar Index, which measures the greenback against a basket of six major currencies, rose 0.5%, nearing a two-month high. A stronger dollar makes gold more expensive for buyers outside the United States.
“Investors left gold when the Gaza ceasefire came into effect, which eased tensions in the notoriously volatile region,” said Tai Wong, an independent precious metals investor in the US.
Israel and Hamas signed a ceasefire agreement on October 9, the first step in US President Donald Trump’s plan to end the fighting in Gaza.
“Gold and silver prices may correct further. But the key drivers of gold, such as the need to diversify reserves and rising global debt, remain unchanged. The outlook therefore remains bright,” Wong predicted.
The precious metal has gained 52% since the start of the year, driven by geopolitical tensions, central bank and ETF buying, expectations of a rate cut by the US Federal Reserve and economic uncertainty surrounding US import tariffs.
Minutes from the September meeting showed Fed officials remained concerned about the labor market, but also noted lingering inflation risks. The Fed continues its policy meeting later this month. Investors expect the agency to cut interest rates by another 25 basis points (0.25%).
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