MUSCAT: Gold prices slipped in early trading today as investor appetite weakened amid signs of easing global trade tensions and a stronger U.S. dollar. The precious metal, which often benefits from geopolitical uncertainty and currency instability, saw its safe-haven appeal diminish as markets responded positively to developments suggesting smoother international negotiations. Traders noted that the waning fear of trade disruptions has reduced the urgency to hedge with gold, leading to a downturn in prices.
Analysts highlighted that the U.S. dollar’s rebound also played a key role in gold’s decline. A stronger dollar tends to make gold more expensive for foreign buyers, thus dampening international demand. As the dollar firmed against a basket of major currencies, commodities priced in dollars, including gold, became less attractive. This currency dynamic placed downward pressure on bullion markets, with many investors reallocating assets to interest-bearing alternatives that offer more immediate returns.
Additionally, recent economic data from key economies, including improved manufacturing output and stable inflation figures, has bolstered confidence in the global recovery narrative. This optimism has reduced the urgency to hold onto defensive assets like gold. As equities gain traction and risk appetite grows, fund managers are increasingly diverting capital toward growth-driven investments rather than traditional hedges like gold. The broader sentiment shift has contributed to the drag on gold’s performance.
Despite the current dip, some market experts caution that the metal’s longer-term prospects remain intact, especially given lingering uncertainties over interest rate policies, inflation trajectories, and potential geopolitical flare-ups. Should the global outlook darken again or central banks shift towards dovish policies, gold could regain favor as a hedge. For now, however, the combination of easing tensions and a stronger greenback appears to be setting the tone for near-term consolidation in gold markets.
