Gold Prices Correct, Market Monitors US-Iran Negotiations
Gold prices (XAU/USD) weakened on Thursday (May 21), trading around $4,504 per ounce, down nearly 0.85% as the market digested the latest news regarding the US-Iran conflict. A Reuters report that Iran's Supreme Leader ordered near-weapons-grade uranium to remain domestically dampened hopes for a quick deal, although Iranian officials later denied the report.
Safe-haven sentiment boosted the US dollar, with the US Dollar Index (DXY) remaining above 99, its highest level in more than a month. Rising oil prices fueled inflation concerns and added to expectations that the Federal Reserve could raise interest rates later this year. The minutes of the Fed's April meeting showed that a majority of officials were prepared to adjust policy if inflation remained above 2%, supporting multi-month high Treasury yields.
Pressure from a strong dollar and high bond yields has been a drag on non-yielding gold, limiting XAU/USD's upward momentum.
On the data front, US initial jobless claims fell to 209,000, lower than the 210,000 expected. Meanwhile, the S&P Global PMI showed US manufacturing activity rose to 55.3, a 48-month high, with the services PMI declining slightly to 50.9, signaling solid manufacturing sector growth but moderate demand for services.
Variables to monitor: developments in US-Iran negotiations, oil price movements, Treasury yields, inflation data, and the next Fed policy decision. (arl)*
Source: newsmaker.id
