Gold Rises Slightly, But on Track for Third Monthly Loss
Gold prices edged higher on Friday (May 29), but remained on track for a third consecutive monthly decline as the US-Israel war against Iran raised inflation concerns and reopened the possibility of higher US interest rates remaining.
Spot gold rose 0.6% to US$4,518.57 per ounce at 08:07 GMT, as investors assessed reports of an extension of the US-Iran ceasefire. The day before, gold had touched a two-month low of US$4,365.76 before closing higher. US gold futures for August delivery rose 0.4% to US$4,549.10.
Despite the intraday recovery, gold is still down about 2.2% so far this month and about 15% over the past three months. The main pressure comes from the policy channel: as a non-yielding asset, gold tends to be restrained when the market expects interest rates to remain tight.
On the geopolitical front, sources said the US and Iran reached an agreement on Thursday to extend the ceasefire and ease shipping restrictions in the Strait of Hormuz. However, President Donald Trump's approval has not yet been forthcoming, and Iranian state media stated the deal has not been finalized. Meanwhile, oil fell more than 1% on Friday and headed for its deepest weekly decline since early April, slightly easing concerns about energy inflation.
Data showed US inflation in April rose at the fastest pace in three years, reinforcing the view that the Fed will keep interest rates unchanged well into next year. Gold is often viewed as an inflation hedge, but in practice, bullion's performance is often depressed when high interest rates persist as investors gravitate toward yield-bearing assets. (Arl)*
Source: Newsmaker.id
