Is President Putin the cause of fluctuations in world gold prices?

The world spot gold price fell nearly 38 USD to 3,201 USD/ounce. During the trading session on May 16, the gold price dropped to 3,155 USD. Later, this precious metal recovered somewhat after Moody's downgraded the US credit rating due to the fiscal deficit and increased interest payments.

Gold’s moves were supported by a weaker dollar and a series of disappointing U.S. economic data, while Russian President Vladimir Putin’s decision to skip peace talks with Ukraine also boosted the safe-haven sentiment.

Peter Grant, vice president and senior metals strategist at precious metals firm Zaner Metals, said that President Putin's failure to personally attend the talks in Turkey has reduced expectations of a near-term peace deal.

According to him, this also contributed to supporting gold prices. A day earlier, Russia announced that it would only send a delegation to the negotiations, ignoring the request for direct dialogue from Ukrainian President Volodymyr Zelensky.

Russian President Vladimir Putin (Photo: TASS).

Gold prices still lost nearly 4% for the week, mainly due to the cooling of US-China trade tensions. Last month, the precious metal peaked at $3,500 an ounce as trade tensions escalated.

"The cooling of the US-China trade war has increased demand for risky assets. Gold investors are also taking profits, triggering a wave of asset selling throughout the past week," said Jim Wycoff, senior analyst at Kitco Metals, in the report.

Experts say that cautious sentiment still prevails in the market as global trade tensions have not completely subsided. Previously, the US and China reached an agreement to sharply reduce import tariffs for 90 days.

In addition, newly released data showed that the US producer price index (PPI) unexpectedly fell in April, while retail sales recorded a slowdown in growth. Previously, the consumer price index (CPI) released earlier this week also showed that inflationary pressures were easing.

The decline in inflationary pressures has led markets to expect the US Federal Reserve to cut interest rates in September. Low interest rates are generally good for gold, as the precious metal does not pay interest. "The May 15 data has increased the room for the Fed to cut interest rates, and expectations for policy easing are growing," Mr. Peter Grant said in the report.

The USD Index fell nearly 0.2%, making gold more attractive to investors holding other currencies.

Source: https://dantri.com.vn/kinh-doanh/tong-thong-putin-co-phai-la-nguyen-nhan-khien-gia-vang-the-gioi-bien-dong-20250516171252957.htm