Gold Rises Slightly as Israel-Lebanon Ceasefire Draws Dip-Buyers
Gold prices rose on Thursday after Israel and Lebanon agreed to a conditional ceasefire, seen as a first step toward resolving the Middle East conflict that has disrupted energy markets and fueled inflation risks. Gold briefly rose as much as 0.7% to near US$4,465/oz, partially recovering a 1.2% drop in the previous session when buyers returned to the low-price zone.
The agreement, according to a joint statement from Israel, Lebanon, and the US, is contingent on a “complete cessation of fire” by Hezbollah. Markets welcomed it as a sign of de-escalation, although the broader conflict, particularly the US-Iranian front, remains far from resolved and vulnerable to changes on the ground.
Earlier, Wednesday’s clashes were the most serious flare-up since the April ceasefire, with Kuwait and Bahrain also affected amid an escalation that threatened US-Iran talks. Washington and Tehran reportedly have a rough outline for extending the ceasefire and reopening the Strait of Hormuz, but final details remain deadlocked. Trump said Hormuz would open "soon" after Iran signed the MoU, but Tehran still refused to meet certain conditions.
Prolonged disruptions to energy flows through Hormuz have driven up oil prices and maintained global inflationary pressures. This inflationary environment makes central banks more likely to hold interest rates high for longer—a bias that typically puts downward pressure on gold, as it offers no yield. However, after three days, oil prices corrected amid news of an Israel-Lebanon ceasefire, helping to ease short-term pressure on yields and the dollar.
However, gold's recovery remains limited without a more comprehensive resolution to the conflict. Fed officials like Lorie Logan have suggested another rate hike could be necessary if inflation doesn't fall to 2%, while analysts believe lingering tightening expectations are making it difficult for gold to build strong confidence. In Asian trading, spot gold rose slightly to around US$4,446/oz, while the dollar weakened slightly. (asd)*
Source: Newsmaker.id
