Gold Stable, Market Awaits Certainty in the Middle East and the Fed
Gold prices moved relatively stable in trading on Tuesday after rebounding from their lowest level since March 23. Gold's gains came as the US dollar weakened after Israel and Iran declared they had halted attacks on each other following diplomatic encouragement from US President Donald Trump. However, gold's gains remained limited as investors preferred to await further certainty regarding the geopolitical situation in the Middle East.
Hopes for peace in the region remain overshadowed by several obstacles. Negotiations between the United States and Iran regarding their nuclear program have not shown significant progress. Washington wants assurances that Iran cannot develop nuclear weapons, while Tehran demands the lifting of sanctions, the release of frozen assets, and recognition of its control over maritime traffic in the Strait of Hormuz.
This uncertainty keeps geopolitical risks high. Although open conflict between Israel and Iran has subsided, the market still sees the potential for tensions to escalate at any time. This helps maintain interest in safe-haven assets like gold, while limiting further declines in the price of the precious metal.
On the other hand, the market is also facing concerns about persistently high inflation due to disruptions to energy shipments through the Strait of Hormuz. This situation has fueled expectations that the Federal Reserve will maintain its hawkish stance for longer. Market participants even assess the likelihood of a US interest rate hike by the end of the year as still quite significant, which has kept US bond yields high and hampered gold's rise.
Investors' focus is now on the release of US inflation data, namely the Consumer Price Index (CPI) and the Producer Price Index (PPI), which will be released this week. This data will provide important clues to the direction of the Fed's future policy. As long as geopolitical uncertainty and expectations of high interest rates persist, gold's movement is expected to remain limited, with the risk of downward pressure still quite dominant. (asd)*
Source: Newsmaker.id
