Gold prices traded unevenly on Monday as investors monitored ongoing weakness in global bond markets fueled by concerns about accelerating inflation and higher interest rates.
Gold Slips After Earlier Recovery Attempt
By 07:24 ET (11:24 GMT), spot gold was down 0.1% at $4,536.03 per ounce, while gold futures declined 0.5% to $4,539.59 per ounce.
Earlier in the session, bullion prices had moved modestly higher after previously falling to their lowest level since March 30.
Gold has retreated from levels seen at the start of the Iran conflict in late February as investors increasingly turned to the U.S. dollar for safety. The dollar has been supported by expectations that the U.S. economy, as a major exporter of energy, may be better positioned to withstand an energy shock tied to the war.
A stronger dollar generally makes gold more expensive for buyers using other currencies.
Inflation and Interest Rate Concerns Weigh on Bullion
At the same time, concerns that the conflict could trigger another wave of inflation have also reduced gold’s appeal.
Central banks often respond to rising inflation by increasing interest rates, which can hurt demand for non-yielding assets such as gold.
Fresh Drone Attacks Renew Geopolitical Fears
Over the weekend, a drone strike sparked a fire at a nuclear facility in the United Arab Emirates, while Saudi Arabia announced that it had intercepted three drones.
The incidents renewed doubts surrounding the fragile ceasefire between Washington and Tehran.
President Donald Trump posted on social media that “the clock is ticking” for Iran to agree to a peace deal or risk renewed military action from the United States.
China Trip Fails to Deliver Iran Breakthrough
Some investors had hoped last week that Trump’s visit to China, one of the largest importers of Iranian oil, could help produce progress in negotiations involving Iran.
However, the summit failed to generate any immediate commitments from Beijing.
“The weekend […] saw a return of concerns over the ongoing war between the U.S. and Iran,” said David Morrison, Senior market Analyst at Trade Nation, in a note.
“These fell out of focus while the Trump administration was in Beijing. But they bounced back into sight as it became painfully apparent that the Chinese trip was a non-event, while Iran appears in no mood to accede to the U.S. peace plan.”
Gold price
Source: finance.yahoo.com
