Gold Dips Amid Strong Dollar and US–Iran Tensions
Gold saw a decrease on Monday, impacted by a robust dollar, while escalating oil prices heightened worries about inflation and the likelihood of sustained high interest rates amid stalled US-Iran peace talks. As of 0059, spot gold saw a decrease of 0.3 per cent, trading at $4,694.26 per ounce. Last week, the metal experienced a decline of 2.5 percent, marking the end of a four-week winning streak. US gold futures for June delivery fell by 0.9 percent, closing at $4,697.60. US President Donald Trump remarked on Sunday that Iran may initiate contact if it desires to negotiate a resolution to their two-month conflict, underscoring that it must never acquire a nuclear weapon.
This follows Tehran’s assertion that the US must remove obstacles to a potential agreement, particularly its blockade of Iran’s ports. Trump cancelled a trip by two US envoys to Iran war mediator Pakistan on Saturday, marking a setback to peace prospects following the Iranian foreign minister’s departure from Islamabad, where he spoke exclusively to Pakistani officials. Oil prices rose, the dollar saw a slight increase, and US stock futures fell as the impasse in US-Iran peace negotiations continued to disrupt Middle East energy exports, creating apprehension among markets and policymakers in anticipation of a busy week of central bank meetings.
On Sunday, Republican Senator Thom Tillis announced that he would allow the Senate confirmation of Federal Reserve chair nominee Kevin Warsh to move forward, after the Department of Justice decided on Friday to discontinue its investigation into Fed Chair Jerome Powell. In contrast, gold premiums in India surged last week to their highest level in 2-1/2 months as supplies tightened, while buying interest increased in China.
SPDR Gold Trust, acknowledged as the largest gold-backed exchange-traded fund globally, announced a decrease in its holdings by 0.2 percent, resulting in a total of 966.30 metric tons as of Thursday. Investors are currently awaiting the US Federal Reserve’s decision on interest rates, following its two-day meeting on Wednesday. Spot silver fell by 0.3 percent to $75.48 per ounce, and platinum also saw a decrease of 0.3 percent, settling at $2,005.15. Palladium experienced a decline of 0.3 percent, concluding at $1,492.22.
