Gold Rises 2%, But Remains Down Monthly
Gold prices rose more than 2% on Thursday (April 30th), supported by a weaker US dollar and easing oil prices, but remained on track for a second consecutive monthly decline amid inflation concerns stemming from the Iran war, which clouded the outlook for interest rate cuts.
Spot gold rose 2.2% to US$4,639.26 per ounce, after hitting a one-month low on Wednesday. June gold futures rose about 2% to US$4,652.30.
The dollar's weakness was triggered by Japanese officials' firm signals about potential intervention to support the yen, which made dollar-denominated gold more affordable for holders of other currencies. At the same time, global oil prices fell after briefly touching a four-year peak, giving gold room for a recovery in the intraday session.
Despite the rebound, spot gold fell 0.7% so far this month. Energy surges during the conflict heighten inflation risks and make the path to interest rate cuts more limited, while higher interest rates typically reduce gold's appeal compared to interest-bearing assets.
The Fed held interest rates steady on Wednesday while highlighting inflation concerns, and the Bank of England also held rates steady while outlining scenarios of the impact of an Iran war that, under certain circumstances, could lead to a more forceful increase in borrowing costs. Market participants are now closely monitoring the direction of US inflation, the movement of the dollar and oil, and central bank signals regarding the timing of easing, amidst weakening physical demand volatility in India and rising premiums in China ahead of the May Day holiday. (gn)*
Source: Newsmaker.id
