Gold Steady on Optimism for US-Iran Peace Deal
Gold prices (XAU/USD) held steady on Thursday (May 22), rising slightly to $4,543 per ounce after previously falling as much as 1.2%. Optimism regarding a possible US-Iran ceasefire tempered expectations that central banks would maintain high interest rates for longer to curb inflation.
US Secretary of State Marco Rubio cited “positive signs” regarding the deal, with Pakistani mediators scheduled to visit Tehran to review Washington’s latest proposal. Meanwhile, shipping through the Strait of Hormuz has remained halted since the conflict erupted, sending energy prices soaring and weighing on the global economy.
Concerns that the Fed and other central banks may need to raise interest rates remain a key factor for gold traders, given that the precious metal offers no yield and typically performs better in a low-interest environment. Since the start of the conflict in February, gold prices have fallen nearly 14%.
Analysis from Citigroup suggests that if tensions in the Strait of Hormuz ease, macro headwinds on gold will ease, allowing prices to stabilize. If the energy outages persist for a longer period, concerns about stagflation could boost demand for gold and other precious metals.
Other precious metals moved positively: silver rose 1.2% to $76.78 per ounce, while platinum and palladium also strengthened. The Bloomberg Dollar Spot Index remained relatively stable.
Variables to monitor: developments in US-Iran negotiations, the status of the Strait of Hormuz, Fed interest rates, and global energy prices.
Source: Newsmaker.id
