Gold Rises Slightly, But Held Back by US-Iran Uncertainty
Gold prices rose slightly on Tuesday (June 2), but gains were limited as the market continued to receive conflicting signals regarding the status and scope of US-Iran peace talks. Spot gold was around US$4,486/oz, while futures rose 0.2% to US$4,516.62/oz, amid a range-bound dollar and equities, while oil prices strengthened.
Tehran said for a second day that communications with Washington had been suspended, but President Donald Trump and Secretary of State Marco Rubio insisted negotiations were ongoing. Iran, via Fars, also reported that there had been no communications for at least several days, citing the need to create a draft memorandum of understanding (MoU). Trump strongly denied this, saying communications were ongoing, while Rubio, speaking in the Senate, asserted that "we are in talks" and suggested there was a possibility that discussions on aspects of Iran's nuclear program could occur at any time, including this week.
This uncertainty was exacerbated by the dynamics in Lebanon. Reports suggest Israel and Hezbollah are moving toward a partial ceasefire, but Israel also reported intercepting projectiles from Lebanon. On the US side, Trump stated that Hezbollah has promised not to attack Israel through mediation, and claimed Netanyahu will withdraw its attack on Beirut. For the market, this inconsistent news makes it difficult for gold to take a clear direction: safe-haven demand is present, but uncertainty about the outcome of diplomacy and its impact on oil inflation continues to hold back the rally.
The nuclear factor remains central to the negotiations, with Trump repeatedly asserting that Iran must not acquire nuclear weapons. At the same time, the market sees the upward trend in oil as a reminder that the risk of energy inflation has not completely disappeared, so expectations of prolonged high interest rates remain a structural burden on gold.
Beyond the Middle East, attention is coming from Europe: an ECB report predicts gold will become the largest asset in total global official foreign exchange reserves by the end of 2025, surpassing US Treasuries, primarily due to valuation effects following the surge in gold prices over the past two years. The ECB emphasized that, despite gold's growing role, it has limitations as a reserve asset: volatility, no yield, storage costs, and supply that is not fully elastic to global liquidity demand. (Arl)*
Source: Newsmaker.id
