Gold Falls Again, US-Iran Clash Weighs on Sentiment
Gold weakened again after the United States launched a new attack on Iran in response to the downing of a US military helicopter near Oman. This tension threatens the fragile ceasefire and increases the risk of prolonged conflict in the Middle East.
Gold prices fell as much as 1.2% to near US$4,200/oz, after weakening 1.6% in the previous session. At 8:15 a.m. Singapore time, spot gold was down 0.9% to US$4,223.82/oz. Silver also fell 0.6% to US$64.97/oz, while platinum and palladium also fell.
Pressure on gold arose as the market feared the US-Iran conflict could prolong disruptions in the Strait of Hormuz, a vital route for global energy shipments. Iranian media reported at least six explosions on Qeshm Island, while Iranian Foreign Minister Abbas Araghchi stated that Iran would not allow any attack or threat to go unanswered. These risks have renewed market concerns about energy supplies.
Wednesday's rebound in oil prices added pressure on gold. If oil rises and energy supplies remain disrupted, global inflation could remain high. This situation makes central banks more likely to hold interest rates high or even raise them. For gold, this scenario is negative because it doesn't provide the same yield as bonds.
From a technical perspective, pressure also intensified after gold fell below its 200-day moving average, a key level often monitored by large investors. A breach of this level could trigger further selling. Standard Chartered assesses that gold's short-term movement will become more vulnerable if the likelihood of an interest rate hike increases, with the next support area located around US$4,100/oz.
Although short-term pressure remains significant, physical demand is not completely weak. The Indian market is said to remain soft, but China remains a bright spot with a stable local premium below US$10/oz. For now, gold's direction will still be heavily influenced by three main factors: developments in the US-Iran conflict, oil prices, and central bank interest rate expectations. (asd)*
Source: Newsmaker.id
