Gold Prices Stay Under Pressure as Central Banks Hold Rates Steady
Gold | 2026-05-07 07:01:20
Despite weaker sentiment, global gold demand, including over-the-counter investment, rose 2% year-on-year to 1,231 tonnes during the first quarter.
By Paul Ploumis
SEATTLE (Scrap Monster): Global financial markets remained cautious last week as major central banks, including the U.S. Federal Reserve, the European Central Bank, the Bank of England, and the Bank of Japan, kept interest rates unchanged amid persistent inflation concerns and geopolitical tensions in the Middle East.
Global equities ended the week mixed, while bond yields and crude oil prices moved higher. The U.S. dollar weakened slightly as investors monitored the escalating U.S.-Iran standoff and uncertainty surrounding the Strait of Hormuz, a critical global oil shipping route.
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Gold prices stayed under pressure after failing to break above key technical resistance near US$4,829 per ounce. Rising U.S. Treasury yields, stronger-than-expected U.S. GDP data, and elevated Personal Consumption Expenditure (PCE) inflation reduced expectations for near-term Federal Reserve rate cuts, limiting investor demand for safe-haven assets.
Despite weaker sentiment, global gold demand, including over-the-counter investment, rose 2% year-on-year to 1,231 tonnes during the first quarter. Total market value surged 74% to a record US$193 billion, supported by strong investment flows and continued central bank purchases.
Analysts expect upcoming U.S. non-farm payroll data and Federal Reserve commentary to significantly influence gold and broader market trends.
POLL
What is currently the biggest factor influencing global financial market sentiment?
Frequently Asked Questions
- Why did major central banks keep interest rates unchanged?
Central banks maintained rates due to ongoing inflation concerns and heightened geopolitical risks.
- What factors pressured gold prices last week?
Higher U.S. Treasury yields, strong U.S. economic data and fading hopes for near-term Fed rate cuts weighed on gold.
- How did global gold demand perform in Q1?
Global gold demand increased 2% year-on-year to 1,231 tonnes, supported by investment inflows and central bank buying.
