Gold Falls After Trump Sends Mixed Signals on Iran
Gold prices weakened after US President Donald Trump's speech offered no clarity on resolving the Middle East war. The precious metal briefly strengthened, but then reversed course as the market viewed Trump's message as opening the door to both escalation and de-escalation.
Bullion fell 2.3% after Trump declared the month-long conflict "nearing its end," but at the same time confirmed that the US would strike Iran "very hard" in the next two to three weeks. Trump also stated that military operations were nearly complete and called on allies dependent on Middle Eastern oil supplies to help resolve the nearly closed Strait of Hormuz.
The cross-asset movement was simultaneous: equities weakened, the US dollar strengthened, and oil prices surged amid concerns about energy flows through the Strait of Hormuz. Before the war, this strategic waterway served as a transit route for about a fifth of the world's oil and liquefied natural gas (LNG), so prolonged disruptions made the market sensitive to any signs of escalation.
In this situation, gold's appeal as a hedge appears to be diminishing. During conflicts, a recurring pattern is for investors to sell off gold positions to cover losses in other assets, resulting in liquidation flows that often depress prices even as geopolitical uncertainty increases.
Several analysts believe Trump's speech emphasized the narrative of "military success" rather than signals of a ceasefire. After a sharp rally that briefly took gold to the US$4,800 intraday level, the market is beginning to anticipate potential slowdowns if risk appetite wanes due to concerns about expanding US operations, including the risk of ground operations.
In Thursday morning trading in Singapore, the spot gold price fell 1.2% to US$4,703.18 per ounce. Silver weakened 2.8% to US$72.98, while platinum and palladium also fell. Meanwhile, the Bloomberg Dollar Spot Index rose around 0.2%, confirming the strengthening dollar, which is also weighing on gold prices. (asd)
Source: Newsmaker.id
