Gold Rebounds, Fed's Hawkish Stance Limits
Gold prices rose on Monday (June 22nd), attempting to end the downward pressure after three consecutive sessions of decline. Spot gold hovered around US$4,190 to US$4,209 per troy ounce, as investors returned to precious metals after crude oil prices fell and Middle East geopolitical sentiment began to ease.
Gold's primary support came from positive developments in peace talks between the United States and Iran. Iranian Foreign Minister Abbas Araghchi cited significant progress in negotiations in Switzerland, while mediators between Qatar and Pakistan stated that the two sides had agreed on a roadmap to a broader agreement. Technical talks are also scheduled to continue this week, raising hopes in the market that the risk of global energy supply disruptions will diminish.
The decline in oil prices also played a significant role in gold's movement. Brent was reported to have fallen around 3% after initially strengthening in early trading, as the market assessed the possibility of a supply recovery from the Persian Gulf region. The decline in oil prices helped ease concerns about energy-based inflation, thus easing pressure on the Fed to raise interest rates more aggressively.
Nevertheless, gold's gains still appear limited. Market participants are still digesting the hawkish outcome of last week's Fed meeting, with several US central bank officials leaving open the possibility of an interest rate hike if inflation doesn't subside quickly. This has kept the US dollar strong near its highest level in over a year, limiting the upside potential for non-yielding gold.
Investors are now awaiting the release of US Personal Consumption Expenditures (PCE) data this week. This data is the Fed's favorite inflation indicator and could provide new clues regarding the direction of interest rate policy. If inflation shows signs of easing, gold has the potential to continue its rebound. However, if price pressures intensify again, expectations of interest rate hikes could increase and further pressure precious metals.
In other metals markets, silver also strengthened sharply to around US$66 per troy ounce, while platinum and copper also moved positively. In other metals markets, silver also strengthened sharply to around US$66 per troy ounce, while platinum and copper also moved positively. This increase indicates that sentiment toward metals is improving as pressure from energy prices recedes. However, as long as the US dollar remains strong and the Fed hasn't signaled any easing, the strengthening of gold and other precious metals has the potential to remain subdued. (arl)
Source: Newsmaker.id
