Gold prices continued to fall on Friday, approaching the $4,000 per ounce threshold and near their lowest levels in almost three months. This trend comes amid strong tensions in the financial markets, marked by the retreat of technology stocks and AI-related companies.
In the face of losses recorded on stock markets, some investors have sold precious metals to generate liquidity and offset losses on other investments.
The stock market correction intensified over the week, particularly after Meta Platforms announced its intention to increase its investment spending.
This outlook rekindled investors’ questions about the substantial cost of developing AI infrastructure and the risk of increased debt financing by large technology companies to fund their projects.
The rise in oil prices adds pressure on gold
Meanwhile, the advance in oil prices has reinforced concerns about a potential persistence of inflation.
This context fuels expectations of keeping interest rates at high levels for an extended period, a prospect generally unfavorable for gold, which does not yield any income.
However, growing questions about the long-term profitability of massive investments in AI, considered one of the drivers of American growth, could alter monetary policy outlooks.
In this climate of uncertainty, markets have scaled back their expectations for further increases in the U.S. Federal Reserve’s policy rate (Fed).
A shift toward a less restrictive monetary policy could thus provide support to precious metals, despite the pressures currently weighing on their prices.
