Gold prices sag as Chinese New Year starts

Global factors influence the market, writes Nareerat Wiriyapong

- Nareerat Wiriyapong

Gold prices typically rise during Lunar New Year as demand for the precious metal strengthens during this auspicious season.

Yet prices have repeatedly fallen below US$5,000 per ounce during the past week even as consumers, notably in China, continue to grab gold jewellery during this major gift-giving holiday.

In 2023, bullion rose 0.50% one month before Chinese New Year and 0.67% the week before. In 2024, prices soared 2.37% and 0.58% over those periods, while last year, gold increased 4% and slid 0.11%, respectively, according to local trader Hua Seng Heng.

Bullion rallied briefly on Friday when modest US inflation data enhanced the case for the Federal Reserve to trim interest rates. Lower borrowing costs are a tailwind for nonyielding precious metals.

Yesterday the metal fell by 1.4%, having lost 1% in the previous session, and was down significantly from a record of $5,595 an ounce in late January, which was attributed to speculative buying.