Gold Slips as US-Iran Ceasefire Talks Weigh on Safe-Haven Demand
By Aboki Forex —
Gold edged lower on Tuesday, giving back some of the previous day’s gains, as the market tracked developments around a potential US-Iran ceasefire. The precious metal swung between gains and losses before settling just above $4,500 an ounce.
Treasury yields hovered near multiyear highs, with elevated energy prices stoking inflation fears. Higher borrowing costs reduce the appeal of non-yielding bullion. Meanwhile, the dollar rose 0.2%, making gold more expensive for many buyers.
President Donald Trump said Monday he had authorised a new wave of attacks against Iran this week, but was holding off after leaders of Qatar, Saudi Arabia and the United Arab Emirates asked for more time to pursue diplomacy.
Gold has traded in a narrow range since falling sharply in the early days of the war. Inflationary fears have been tempered by the possibility of monetary easing on growth concerns. Bullion is down nearly 14% since the conflict began.
“The fluidity regarding the situation in the Middle East, along with oil prices and bond yields, may still weigh on gold in the short term,” said Vasu Menon, a strategist at Oversea-Chinese Banking Corp. “We continue to see gold as a useful hedge against global uncertainties given significant political and economic changes happening globally, which look set to gather pace in the coming years.”
Spot gold was 0.5% lower at $4,544 an ounce as of 9:13 a.m. in London. Silver fell 2.2% to $76.05. Platinum and palladium also declined.