US-Iran Conflict Pressures Gold's Luster
Gold prices weakened near US$4,000 per troy ounce after renewed tensions between the United States and Iran rekindled inflation concerns. Pressure arose after the two countries launched attacks on each other in the Persian Gulf, putting the ceasefire that had previously calmed the market to the test.
Spot gold prices fell by 0.9% after rising 1.6% on Friday. At the time of writing, gold was trading at US$4,061. This decline occurred as oil prices rebounded after an oil tanker carrying Qatari crude was attacked in a series of retaliatory attacks over the weekend. Disruptions around the Strait of Hormuz have renewed market concerns about the risk to global energy supplies.
However, the United States and Iran have reportedly agreed to halt the attacks and are scheduled to meet on Tuesday in Doha. This news has somewhat eased market panic, but is not enough to allay investor concerns about the impact of the conflict in the Middle East.
This latest tension comes after US inflation data continued to show high price pressures, although the figures were in line with analysts' expectations. The Personal Consumption Expenditures (PCE) price index, the Federal Reserve's main inflation indicator, rose 0.4% in May. This data keeps the market cautious about interpreting the direction of US interest rates.
In recent months, gold has been under significant pressure as rising energy prices have exacerbated inflation risks. This situation has fueled expectations that central banks will maintain high interest rates for longer. This situation presents pressure for gold because the precious metal does not provide a return like bonds or other interest-bearing instruments.
In morning trading in Singapore, the spot gold price fell 0.6% to US$4,062.47 per troy ounce. Silver also weakened 0.8% to US$58.67, while platinum and palladium also fell slightly. Meanwhile, the Bloomberg Dollar Index moved slightly higher after previously weakening 0.6%, adding to pressure on precious metal prices. (asd)*
Source: Newsmaker.id
