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Gold holds steady as US-Iran tensions and Fed expectations stay in focus
Spot gold traded near $4,060 an ounce, while strategists cited potential rebound from central bank demand even as energy prices and rates expectations pressure the metal.
Gold prices moved in a narrow range as traders weighed diplomatic efforts aimed at cooling US-Iran tensions and the outlook for US interest rates, according to LiveMint Markets, citing Bloomberg. Bullion traded close to $4,060 an ounce after finishing Monday little changed. The article links the market focus to developments around the Strait of Hormuz, where President Donald Trump said his latest offer of talks to Tehran was its “last chance,” and expected the strait to reopen fully, while Tehran denied talking with the US and said discussions with Oman to increase ship movement through Hormuz were progressing. The piece also points to concerns about the yen after US and Japanese officials signaled they remain determined to defend the currency following their first joint intervention in 15 years, noting that any moves to support the yen could involve selling US Treasuries and potentially pressure US bond markets. On the rate outlook, LiveMint Markets notes gold has fallen more than a fifth since the US-Iran war began in late February, as higher energy costs have fed inflation worries and supported “higher for longer” expectations for interest rates. It adds that while Fed officials kept policy unchanged last week, with three dissents for a hike, New York Fed President John Williams said rates are “well positioned” if inflation eases in the second half, while central bank action could be needed if inflation does not behave as expected. Strategists at Goldman Sachs said renewed central bank buying led by China could support prices, even with temporary downside from energy and rates, and Citi Research suggested gold could stagnate or decline over the next month before rallying toward $4,500 in the fourth quarter if Hormuz flows normalize and rates fall.
Latest closeGold $4,106.70 ▲1.4%