Tensions Rise, But Gold Pressured by Dollar Strength
Gold prices remain below the psychological level of US$4,800 and have been under pressure in recent trading, despite renewed tensions between the United States and Iran. Overall, this situation suggests that current geopolitical factors are not strong enough to drive gold prices higher, as the market is more focused on the strengthening US dollar and rising bond yields.
The main pressure comes from a stronger US dollar, which makes gold more expensive for holders of other currencies. Furthermore, rising US bond yields increase the attractiveness of interest-bearing assets, thereby reducing interest in non-yielding gold. This combination is the dominant factor holding back gold's movement in the short term.
On the other hand, US-Iran tensions have actually heightened global inflation concerns, particularly through rising energy prices. However, this effect has largely fueled expectations that interest rates will remain high for longer, which ultimately puts downward pressure on gold. Historically, a high interest rate environment tends to limit the rise of precious metals.
In conclusion, gold's weakening below US$4,800 does not indicate a decline in global risk appetite, but rather a shift in market focus to the dollar and yields. As long as US bond yields remain high and the dollar remains strong, gold will likely see limited movement, even if geopolitical tensions persist. (Zaf)
Source: Newsmaker.id
