Gold Steadies as Traders Digest Uncertainty Over Middle East War
Gold was little changed, as traders digested conflicting statements by US officials over the war in the Middle East that added to extreme volatility in energy markets.
Bullion was near $5,200 an ounce, having gained 1% in the previous session. The White House said the US had not escorted an oil tanker through the Strait of Hormuz, contradicting a now-deleted social media post by Energy Secretary Chris Wright. Oil prices jumped after plunging on Tuesday, while a gauge of the US dollar retreated 0.1%.
Now entering its 12th day, the war continues to disrupt crude production and refining across the Middle East. The US and Israel conducted their most intense day of attacks yet against Iran and won’t give up until the Islamic Republic is beaten, the Pentagon said on Tuesday, striking a more aggressive tone after President Donald Trump’s earlier indication that the conflict could end soon.
For gold, higher energy prices have increased concerns over inflation, in turn reducing expectations that the Federal Reserve and other central banks will cut interest rates. Higher borrowing costs are a headwind for precious metals, which don’t pay interest. Bullion — which has gained around a fifth this year — is also a source of liquidity used by investors to shore up other parts of their portfolios.
Spot gold edged up 0.1% to $5,197.28 an ounce as of 6:19 a.m. in Singapore. Silver added 0.7% to $88.90. Platinum and palladium traded higher.
Source: Bloomberg.com
