$4,000 Becomes Gold's Last Stronghold
Gold prices held above US$4,000 per troy ounce on Tuesday (June 30th), as market participants weighed the direction of US monetary policy following the release of a number of recent economic data. The precious metal's movement remained limited as investors remained unconvinced that the pressure of high interest rates had eased.
US economic data indicated that the economy remains resilient. Job openings in May indicated stable labor demand, while consumer sentiment also improved. This gives the Federal Reserve room to maintain high interest rates while monitoring inflation.
Spot gold traded relatively stable at around US$4,013.75 per troy ounce during the New York session. Silver rose 1.2% to US$58.98 per troy ounce, while platinum and palladium weakened. The Bloomberg Dollar Index was also relatively stable, so pressure on the greenback was minimal during the session.
Despite holding above US$4,000, gold remains under significant pressure. Precious metal prices have fallen sharply since the Iran war began in late February. Gold also briefly broke through several important technical levels, including the 200-day moving average, commonly used to gauge long-term momentum.
The decline in oil prices after a spike due to the Middle East conflict has helped ease some concerns about energy inflation. However, the market continues to bet that the Fed may need to raise interest rates this year if inflation doesn't fall decisively.
High interest rates are a major drag on gold. As a non-yielding asset, gold tends to be less attractive when bond yields and other interest-bearing assets rise. Therefore, any hawkish signal from the Fed still has the potential to depress gold prices.
Ole Hansen, Head of Commodity Strategy at Saxo Bank, believes there are still concerns that the Fed will maintain its hawkish stance despite the sharp decline in energy prices. He also believes gold's rebound from last week's low has given traders some confidence, but prices still need to break through US$4,100 to signal that a short-term bottom has been established.
From a geopolitical perspective, market participants are also closely monitoring developments in the peace talks between the United States and Iran. If the negotiation process improves and oil prices continue to fall, inflationary pressures could ease. However, if tensions escalate again, gold could find safe-haven support, although interest rate pressures may still limit its upside potential.
Overall, gold remains in a fragile phase. The US$4,000 area represents a crucial psychological support area that must be maintained. If the price can break through and hold above US$4,100, the opportunity for a short-term rebound could be greater. However, if it falls back below US$4,000, selling pressure risks extending to lower levels. (arl)
Source: Newsmaker.id
