Global High Interest Rate Trend Weighs on Gold and Silver Prices

Gold and silver prices are falling as the global trend of high interest rates strengthens. This is unusual, given that gold and silver are considered safe-haven assets. However, their prices tend to move inversely with interest rates.

The price of international gold futures on the New York Mercantile Exchange (COMEX) has been around $4,200 per ounce, down from its recent high of $4,700 an ounce. Silver prices have also fallen, currently trading at around $60 an ounce after rising to over $70.

The decline in gold and silver prices is not limited to the metals themselves, but has also affected exchange-traded funds (ETFs) that track their prices. ACE KRX and TIGER KRX gold spot products have fallen nearly 10% in the past month, while other ETFs such as SOL International Gold, KODEX Gold Futures (H), and TIGER Gold Futures (H) have also seen significant declines.

Similarly, silver-tracking ETFs have not fared better, with 1Q silver active, KODEX silver futures (H), and TIGER silver active all falling sharply over the same period. Choi Jin-young, a researcher at Daishin Securities, attributes this decline to China's rising producer prices, which are causing import prices in other countries to rise, leading to concerns about interest rates and making it difficult for gold prices to rise.