Gold Weakens, US Naval Blockade Raises Uncertainty
Gold prices weakened slightly in European trading on Wednesday (April 15th) after briefly touching a one-month high in the previous session, while market attention remained focused on the possibility of resuming US-Iran peace talks before the ceasefire expires next week. Spot gold fell 0.7% to US$4,803.17/oz, while futures fell 0.3% to US$4,838.40/oz.
Tuesday's rally was driven by a combination of softer-than-expected US producer price inflation (PPI) data and a weaker dollar, which rekindled bets that the Federal Reserve still has room to cut interest rates later this year. The PPI pattern is said to be in line with the CPI: headline inflation is driven by energy costs, but core inflation is limited. Former Fed Chair and former US Treasury Secretary Janet Yellen also said the possibility of one interest rate cut this year remains open—a condition that typically supports non-yielding assets like gold.
However, this support was tempered by a resurgence in the energy risk premium. Oil prices recovered on Wednesday after the US military said the naval blockade against Iran was fully in place, which was seen as pressure to push for a deal. President Donald Trump mentioned the possibility of further talks in the next two days and suggested the end of the war was near, while reports suggested Washington and Tehran were both keeping the door open for dialogue ahead of the ceasefire expiring next week.
In other metals, spot silver fell 1% to US$78.675/oz, while platinum was relatively flat at US$2,107.21/oz. The market will be monitoring developments in US-Iran negotiations, the status of the blockade and energy flows, oil price movements, the direction of the dollar and US yields, and Fed policy signals ahead of the ceasefire expiration. (Arl)*
Source: Newsmaker.id
