Gold Fluctuates Over Iran Issue
Gold prices were volatile on Monday (July 20th), as the market responded to various news from the Middle East. XAU/USD hovered around US$4,010 per troy ounce, remaining relatively stable on a daily basis after briefly rising to US$4,040 intraday.
Gold initially strengthened after Iran and the United States both signaled that diplomatic channels remained open. Iranian Foreign Ministry spokesman Esmaeil Baghaei said mediators had exchanged messages with Tehran in recent days.
These comments initially put pressure on the US dollar and oil prices, allowing gold to rise. However, gold's gains were short-lived as new geopolitical risks emerged from the Red Sea region.
The Iran-aligned Houthi group in Yemen reportedly announced a naval blockade against Saudi Arabia. This news rekindled market concerns about energy supply disruptions and caused oil prices to rebound from intraday lows.
The US dollar also recovered after briefly weakening. The US dollar index hovered around 100.90 after previously dropping to 100.65. The dollar's recovery and rising oil prices have limited room for gold to strengthen.
As a result, gold still has the potential to fluctuate wildly, as the primary sentiment stems from geopolitics. If diplomatic news intensifies, gold could be held back or even corrected. However, if the conflict escalates to Saudi oil routes and the Strait of Hormuz, safe-haven demand could again support gold, although it remains limited by expectations of high interest rates from the Fed. (arl)
Source: Newsmaker.id
