Gold Rebounds to $4,200, Market Awaits Evidence of Iran Deal
Gold prices held near US$4,220/oz after posting their biggest daily gain since March. This gain occurred after US President Donald Trump said a deal with Iran could be signed as early as this weekend, prompting the market to assess the risk of war and energy disruptions may be easing.
Spot gold edged up 0.2% to US$4,221.31/oz at 8:30 a.m. Singapore time, after previously surging 3.4%. Silver also gained 0.5% to US$67.63/oz, while platinum and palladium also rose. The US dollar strengthened slightly by 0.1%, but not enough to derail gold's recovery after the sharp weakening in the previous session.
The main catalyst came from Trump's change in tone. He said Iran's supreme leader had agreed to a peace deal, although he acknowledged that the agreement was not final and remained conceptual. There has been no official confirmation from Tehran. Previously, Trump also canceled plans for a third day of airstrikes on Iran after two days of US attacks and Iran's response, which included announcing the closure of the Strait of Hormuz.
Fundamentally, the gold market remains caught between two major pressures. If a US-Iran deal is reached and Hormuz reopens, the risk of energy inflation could decrease, the dollar could weaken, and gold could receive short-term support. However, if the deal fails, oil prices could rise again, inflation remains high, and expectations of central bank interest rate hikes could put further pressure on gold.
Despite the rebound, gold remains about a fifth below its pre-war level in late February. The previous decline, which broke through the 200-day moving average, triggered technical selling pressure and briefly brought prices near US$4,000/oz. For now, the market will be monitoring confirmation from Iran, developments in Hormuz, the direction of oil prices, and whether gold can hold above the US$4,200/oz area. (Asd)*
Source: Newsmaker.id
