Global gold prices remained under pressure this week, even as the precious metal recovered slightly on Tuesday after earlier losses. Analysts say a stronger U.S. dollar and elevated U.S. Treasury yields are continuing to reduce the appeal of bullion for investors.
Spot gold has now fallen 21% from its record high of $5,594.82 per ounce reached at the end of January, placing the metal firmly in bear market territory. The downturn intensified last week, when gold dropped nearly 10%, marking its worst weekly performance since the European sovereign debt crisis period in September 2011.
On Tuesday, spot gold prices initially declined by about 2% before recovering to trade 0.4% higher at around $4,420.24 per ounce. Meanwhile, gold futures for April delivery were last seen trading largely unchanged at about $4,404.80 per ounce.
Market participants said the recent strengthening of the U.S. dollar has been a major factor behind the fall in gold prices. The dollar index, which measures the greenback against a basket of major currencies, has gained roughly 3% since the start of the war and rose another 0.3% on Tuesday.
A stronger dollar typically makes gold more expensive for investors using other currencies, thereby reducing demand for the dollar-priced metal. As a result, despite occasional rebounds, gold prices have struggled to regain momentum in recent sessions.
