Gold Recovers, Iran Uncertainty and Tightening Remain Loom
Gold prices strengthened after US President Donald Trump again extended the deadline for reaching a deal with Iran, easing selling pressure the previous day even though war uncertainty remained.
Gold briefly rose as much as 2.3% to US$4,475/oz after Trump promised to hold off on attacks on Iranian energy facilities for an additional 10 days. However, the conflict remains heated: Iran and Israel are still firing missiles at each other, Tehran has also targeted several Persian Gulf states, while oil prices have also risen.
Despite the rebound, gold is still down more than 15% since the war began on February 28, and its movement is no longer considered a pure safe-haven. Expensive energy increases the risk of inflation and has led markets to price in higher interest rates for longer or even higher, putting pressure on non-yielding assets like gold. Additional pressure came from reports that Turkey's central bank sold and swapped about 60 tons of gold in two weeks (over US$8 billion), raising questions about whether central bank buying—a long-standing pillar of gold's rally—will slow if other institutions follow suit.
TD Securities believes gold is currently being traded more as a risk asset, as the war has eroded surpluses in East Asia and temporarily dented official sector demand.
At 9:55 a.m. in New York, spot gold rose 1% to US$4,422.75/oz. Silver remained relatively stable at US$67.91, while platinum and palladium strengthened; the Bloomberg Dollar Index rose 0.1%.
Source: newsmaker.id
