Gold's Rise Remains Hindered by This!
Gold prices moved slightly after the US dollar weakened, while market participants assessed efforts to mitigate the oil supply shock stemming from the Middle East war.
In early trading, gold bullion hovered around US$5,000 per ounce, after falling 0.3% in the previous session. The weakening dollar provided some support for gold, making the precious metal relatively cheaper for non-US buyers.
Meanwhile, oil prices rebounded after falling on Monday. The market weighed plans to release emergency reserves and signals of increased supply, while also considering growing threats to energy infrastructure and disruptions to shipping flows through the Strait of Hormuz, which is nearing a standstill.
Prolonged geopolitical tensions have also raised inflation risks. This situation reduces the chances of the US central bank easing policy soon, and market participants now see almost no possibility of an interest rate cut at this week's Fed meeting.
Higher interest rates generally put pressure on gold because this asset does not provide a yield. However, gold's appeal as a safe haven remains amid geopolitical uncertainty and market concerns about the independence of monetary policy.
Spot gold was barely changed at US$5,005.54 per ounce at 7:05 a.m. Singapore time. The Bloomberg Dollar Index rose 0.1% after falling 0.6% on Monday, while silver rose 0.1% to US$80.90, and platinum and palladium also strengthened. (asd)
