Why Is Gold Still Steady Below $3,400 Despite Rising Tensions?
Gold prices were steady in Asian trade on Tuesday (06/17) after falling in the previous session amid growing uncertainty over U.S. involvement in the Israel-Iran war, as well as the potential for a ceasefire.
Bullion prices reversed most of their recent gains after reports that Iran was seeking a ceasefire boosted some risk sentiment on Monday. But Tehran said it would not seek a ceasefire if attacked by Israel, while a warning from U.S. President Donald Trump also raised concerns that an escalation in the war was imminent.
Spot gold rose 0.2% to $3,392.25 an ounce, while August gold futures fell 0.2% to $3,410.70/oz by 1:12 a.m. ET (05:12 GMT). Trump warned late Monday that “everyone should evacuate Tehran immediately,” raising concerns that an escalation in the conflict was imminent.
But the White House has clarified that the US will not directly intervene in the conflict, even as Trump has maintained his tough rhetoric on Iran’s nuclear ambitions.
A report from Axios suggests that Washington is still seeking dialogue with Tehran after the cancellation of scheduled nuclear talks over the weekend. The report said that US and Iranian officials are seeking to hold talks on a ceasefire and a nuclear deal this week, although no date has been set.
Reports of an Israel-Iran conflict, sparked by Israel’s attack on Iran’s nuclear facilities last week, have sapped some of the momentum gold gained after the initial Israeli strikes. Bullion briefly climbed above $3,450/oz on Monday before sharply reversing course.
Citi analysts warned that gold is likely to fall back below $3,000/oz in the coming quarter, as the record-breaking rally begins to dry up. Investor demand for bullion is also expected to decline.
Source: Reuters
