Gold Rebounds, Israel-Lebanon Ceasefire in Focus
Gold prices rose on Thursday after Israel and Lebanon agreed to a conditional ceasefire, seen as a step toward easing the Middle East conflict that has disrupted energy markets. Gold briefly rose by about 1% to reach US$4,475/oz, reversing the previous session's decline when buyers returned to the low-price zone.
The agreement, announced in a joint statement by Israel, Lebanon, and the US, required a "complete cessation of fire" from Iran-backed Hezbollah. This is Washington's latest effort to keep the diplomatic channel alive for Iran, after Wednesday's clashes—involving Kuwait and Bahrain—threatened to derail US-Iran negotiations.
While a rough framework exists for extending the ceasefire and reopening the Strait of Hormuz, a final agreement remains elusive. Trump said Hormuz would be opened "soon" after Iran signs a memorandum of understanding (MoU), but Tehran has consistently rejected some of the conditions. As long as the disruption to energy flows through Hormuz remains unaddressed, the risk of global inflation remains high, prompting central banks to maintain high interest rates for longer.
In the market, gold continues to operate within a fragile context. Since the conflict broke out in late February, gold has fallen sharply and remains around 15% below pre-war levels, although it has moved within a narrow range in recent weeks. After a three-day rally, oil prices corrected following news of an Israel-Lebanon ceasefire, helping to alleviate short-term pressure on yields and the dollar.
However, gold's recovery is considered limited without a more comprehensive resolution. Fed officials such as Lorie Logan have suggested another interest rate hike could be necessary if inflation doesn't return to 2%, and analysts believe that as long as the market is still pricing in the risk of tightening, gold will struggle to build a truly strong rally.
In Asian trading at 11:45 a.m. in Singapore, spot gold rose 0.6% to US$4,460.20/oz. Silver rose 0.8% to US$73.34, while platinum and palladium also strengthened. The Bloomberg Dollar Index remained relatively stable after rising in the previous session. (asd)
Source: Newsmaker.id
