Gold Swayed by Geopolitics!
Gold prices moved within a limited range at the start of trading on Monday (June 22nd) after US President Donald Trump renewed his threat to attack Iran. The threat came as high-level US-Iran talks were underway in Switzerland to find a permanent solution to the war that has rocked global markets.
Gold was around $4,155.80 per ounce at 7:26 a.m. Singapore time, after falling 1.5% over the past week. Prices had previously weakened for three consecutive sessions on Friday, indicating that buying interest remained restrained even though geopolitical risks had not completely subsided.
US-Iran negotiations got off to a rocky start. Iranian media reported that Tehran had suspended talks due to Trump's threats, but sources familiar with the process said discussions continued into early Monday in Switzerland. The two sides had previously signed a memorandum of understanding that opened a 60-day negotiating period for de-escalation.
From a geopolitical perspective, the market is still monitoring energy flows through the Strait of Hormuz. Iran accused Israel of violating the ceasefire in Lebanon, while oil prices remained strong as investors worried the conflict could disrupt supplies again. Although oil continued to flow through Hormuz throughout the weekend, the risks to the energy pipeline have not completely disappeared.
The biggest pressure on gold remains the interest rate outlook. Gold prices have fallen for three consecutive weeks and have weakened by more than a fifth since the war began in late February. Rising energy prices due to oil and gas disruptions have increased the risk of inflation, leading the market to expect central banks to maintain or raise interest rates for longer. This weighs on gold because the precious metal offers no yield.
The main drivers of this movement are gold remaining stuck near $4,170, Trump's threats keeping geopolitical risks high, US-Iran negotiations continuing despite some disruptions, Hormuz risks still influencing energy prices, and the Fed's hawkish tone limiting gold's recovery. The focus next turns to the outcome of the Swiss talks, developments in the Israel-Hezbollah ceasefire, the direction of the US dollar, and the US PCE price index, scheduled for release on Thursday and expected to show accelerating inflation. (asd)*
Source: Newsmaker.id
