Gold prices ticked higher on Tuesday, buoyed by a weaker U.S. dollar and receding inflation concerns as oil price slid on hopes of a quick end to the Iran conflict.
Spot Gold rose 1.5% to $5,213.81 an ounce by 11:03 ET, while Gold Futures rose 2.4% to $5,223.34/oz. Spot prices ticked up marginally on Monday after logging wild swings during the session.
While the Iran conflict did spur haven demand for gold, its gains were tempered by concerns over the inflationary effects of the conflict, which could in turn elicit more hawkish stances from major global central banks. The U.S. dollar, which has largely strengthened since the start of the assault in late February, weakened against a basket of currencies.
Trump comments in Focus
Rick appetite returned somewhat on Tuesday, While oil prices fell, on hopes that the more than week-old Iran conflict could end after President Donald Trump hinted so.
He also touted potential measures to help limit supply disruptions from the conflict, including temporarily waiving sanctions on some oil sellers, most notably Russia.
The market remains highly headline driven. Lower oil from the peak reduces the tail risk of an aggressive policy response, supporting expectations that central banks can stay patient, Neil Welsh, head of metals at Britannia Global Markets, said.
Gold is the main macro beneficiary of this recalibration, catching a bid as the dollar softens and energy driven inflation fears ebb … The tone in gold could now be one of buying dips, with safe haven flows from ongoing geopolitical tension combining with Central bank and institutional demand to keep the broader uptrend intact even as intraday moves remain sharp around key U.S. data later this week, Welsh said.
However, Trump did not provide a clear timeline for such a de-escalation and maintained a largely hawkish rhetoric against Tehran. Trump warned the Islamic Republic of dire consequences if it blockaded the Strait of Hormuz, a vital waterway south of Iran through which a fifth of the world’s oil supply flows.
We will take out easily destroyable targets that will make it virtually impossible for Iran to ever be built back, as a Nation, again — Death, Fire, and fury will reign upon them, Trump said.
Iran rejected Trump’s claims, and said it will continue to block the Strait of Hormuz until U.S. and Israeli attacks on Tehran stop.
” Iran will not rejoin talks without prolonging the economic cost of the war beyond Trump’s comfort zone,” analyst at BCA Research predicted in a note.
Sources : ( Investing.com )