Gold Rebounds from Monthly Low
Gold prices rose back to around US$4,570 per ounce on Tuesday (May 5) after previously hitting their lowest level in more than a month. This increase occurred amid escalating tensions in the Middle East, which have rekindled inflation concerns and shifted global interest rate expectations.
The fragile ceasefire in the region has been further strained by clashes between the US and Iran in the Gulf. The two countries are vying for control of the Strait of Hormuz, which has remained effectively closed since the conflict began. This situation increases the risk of energy supply disruptions and higher price pressures.
US Defense Secretary Pete Hegseth warned that President Donald Trump could resume "major combat operations" against Iran if necessary. The statement added to geopolitical uncertainty and kept risk premiums high in commodity markets.
Surging energy costs have the potential to push inflation higher and delay central banks' interest rate cut plans. Although gold is known as a hedge against inflation, its appeal can diminish in a high-interest rate environment because it does not provide a yield.
Meanwhile, the IMF chief warned that a prolonged conflict in the coming years, coupled with very high oil prices, could trigger a much more severe global economic impact. This situation makes the future direction of gold highly dependent on geopolitical developments and monetary policy.
Source: newsmaker.id
