Gold Rises Slightly, Market Remains in Risk-Off Mode
Gold prices rose on Thursday (March 5) as the Middle East conflict entered its sixth day with no sign of a resolution, boosting demand for safe-haven assets. Spot gold held around US$5,161 per ounce, up about 0.4%.
The gains were briefly larger before being pared back as the dollar rebounded from initial weakness. Reuters noted the strengthening dollar, which was a limiting factor for gold's gains, making bullion more expensive for non-USD buyers.
On the geopolitical front, US-Israeli attacks and retaliation against Iran continued, including a naval incident that added uncertainty to energy flows, while Iran denied reports of an approach to peace talks. These tensions kept risk premiums high, while maintaining interest in safe-haven assets, although dollar and yield volatility played a role.
Inflation risk also returned as a major factor. The surge in energy prices due to the conflict has the potential to delay monetary easing, which typically reduces gold's appeal as the precious metal does not provide a yield. The market is awaiting the next US employment data to gauge the direction of interest rates amid the energy shock.
Source: Newsmaker.id
