Gold Restrains, Hormuz Stallion
Gold held off losses after falling as much as 1.3% amid a stalemate over reopening the Strait of Hormuz, which continued to fuel inflation concerns and roil the bond market. Bullion subsequently pared almost all of its losses and returned to trading around US$4,535/ounce, after dropping nearly 4% last week.
The US and Iran are reportedly still far from an agreement to end the war and reopen Hormuz, a vital energy route that remains effectively closed. This uncertainty keeps energy risk premiums high and makes the market more sensitive to geopolitical headlines.
Oil prices rose on Monday, after President Donald Trump renewed threats against Iran, adding to inflation concerns. Rising energy-based inflation increases the likelihood of interest rates remaining high or even rising, a factor that generally pressures gold, which offers no yield.
In the bond market, a global sell-off pushed yields sharply higher as investors believe a surge in inflation due to the war could pressure central banks to tighten policy. ANZ believes the rise in yields has worsened gold's risk-reward profile, prompting some investors to reduce their positions, although they see potential support if central banks ultimately shift to easing as growth risks intensify.
The market is also monitoring physical demand dynamics, with India's gold imports weakening due to tighter import policies, which are said to be offset by Chinese demand. The focus will now be on the minutes of this week's Fed meeting. At 1:06 p.m. Singapore time, spot gold fell 0.1% to US$4,536.26/ounce, silver fell 0.8%, and the dollar index edged up after strengthening last week. (asd)*
Source: Newsmaker.id
