Gold Rises Slightly, Yields Fall After Hormuz Breakthrough Signals
Gold prices rose on Monday after US bond yields fell, fueled by renewed hopes of a breakthrough in the US-Iranian standoff over the Strait of Hormuz. Bullion briefly rose as much as 1% before paring some of its gains.
The decline in yields was the main driver, as lower interest rates typically increase the appeal of non-yielding bullion. US bond yields fell as much as 3 basis points after Iran's semi-official Tasnim news agency reported that Washington proposed a temporary waiver of sanctions on Iranian oil until a final agreement is reached, citing sources close to the negotiating team.
Despite today's gain, gold remains within a narrow range since its sharp fall at the start of the war. Investors are still weighing two opposing risks: inflation, which could keep interest rates high, versus growth concerns that could prompt monetary easing if the conflict drags on. Cumulatively, gold is said to have fallen more than 13% since the war began.
JPMorgan believes new investment interest in the precious metal has "dried to a trickle" due to concerns about higher interest rates. According to the bank, conflict resolution is key to reviving demand, although the market could still receive support from central bank purchases.
At 10:39 a.m. New York time, spot gold rose 0.2% to US$4,547.68 per ounce. Silver rose 0.86%, while the Bloomberg Dollar Spot Index fell 0.2%, contributing to the precious metal's rally. (gn)
Source: Newsmaker.id
