Why Are Gold and Silver Prices Falling Today?
There are several reasons for this drop.
Increased Risk of Government Shutdown
First, there's a higher risk of a government shutdown in the U.S. Over the weekend, the Department of Homeland Security ran out of money, leading to a partial shutdown during Donald Trump’s second term. Meanwhile, Republicans and Democrats are stuck in talks, and Congress is on break until February 23. Governments are selling many bonds, but not many people want to buy them. This is causing bond yields to rise.
When yields go up, money moves away from metals and into safer investments. As a result, gold and silver are less attractive in the short term.
Uncertainty in Federal Reserve Policy
At the same time, the U.S. Federal Reserve has not made it clear that it will cut rates quickly. Inflation is still high, and interest rates are likely to stay up for a while.
Weaker De-Dollarization Narrative
Another important reason is that the U.S. dollar is stronger.
Reduced Global Liquidity
Finally, less money available globally is putting more pressure on markets. When money is tight, even gold and silver can be sold off.
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