Gold Rises as Escalation Fears Grow
Gold rebounded after three consecutive sessions of declines, amid renewed demand for safe-haven assets following an Axios report that US President Donald Trump would receive a briefing on new military options for action in Iran.
Meanwhile, spot gold rose 1.5% to US$4,616.42 per ounce at 9:58 a.m. in London, after rising as much as 1.8% to return to trading above US$4,600. This gain comes after gold fell 3.4% in the previous three sessions.
Gold's recent move coincided with a rally in oil, with crude prices hitting a four-year high of US$126 per barrel, as the market assessed the prospect of an escalation in the Middle East conflict. Axios also reported that the head of US Central Command, Admiral Brad Cooper, was scheduled to give a briefing on Thursday.
However, fundamentally, gold remains in a crosshairs: the energy boom risks prolonging inflationary pressures and pushing interest rates higher, which is a headwind for gold as it offers no yield. Gold has fallen about 13% since the war began in late February amid repricing policy expectations.
The Fed held interest rates steady on Wednesday, but with hawkish dissent from several officials, while the 2-year Treasury yield rose sharply as markets re-increased tightening bets. The focus next turns to developments in the US-Iran situation, the direction of oil prices, movements in short-term US yields, and dollar dynamics, after the Bloomberg Dollar Spot Index fell slightly by 0.1% this session. (gn)*
Source: Newsmaker.id
