Gold stopped in place. Investors are watching Tehran
Gold loses impetus after an Iran attack. Markets are waiting and paying attention to Tehran. What next with ore prices?
“In response to the US and Israel weekend attack on the three main Iranian nuclear facilities, gold prices initially increased by 0.8 percent, but then weakened, and the quotations stabilized around the level of $ 3355 per ounce” – writes “Puls Biznesu” (“PB”).
Markets, however, remain in a state of uncertainty, waiting for the potential answer of Iran to the massive US and Israel attack on three strategic nuclear objects. The lack of an unequivocal reaction from Tehran weakens pressure to further increases in precious metal prices. Investors, although at first, were looking for safe marina, they are currently cautious – indicated analysts cited by “PB”.
Monday drop in gold prices
As the website notes, on Monday morning the Golden Spot quotations fell by 0.4 percent, to around $ 3355 per ounce. At the same time, the dollar index (Bloomberg Dollar Spot Index) increased by 0.3 percent, which reflected the dollar strengthening as another safe marina. Silver and platinum remained stable, while palladium prices have increased slightly.
“The escalation of the conflict in the Middle East has also raised oil prices, which may raise concerns about the further increase in inflation. The increase in energy costs may reduce the chances of rapid reduction of interest rates by the federal reserve, which adversely works on gold – an act that does not generate interest” – writes “Puls Biznesu”.
According to the website, this year’s gold price increase by almost 30 percent. It was powered primarily by geopolitical tensions and expectations for softening monetary policy in the United States. Currently, however, despite the risks associated with Iran, the lack of specific actions on his part may suggest temporary stabilization on the gold market.
What next with gold prices?
As experts from Puls Biznesu pointed out in the morning, Tehran did not take any serious retaliation, and his operational capabilities remain limited. Political support from Russia and China is primarily declarative, while the promilitarian groups associated with Iran do not have their abilities to actively participate in the conflict. In addition, Tehran’s fears of Beijing’s reaction and a possible increase in oil prices that could harm the Chinese economy, inhibit tension escalation. The price of gold is currently around $ 145 below the record level from April. Lack of a strong geopolitical impulse and uncertainty regarding federal reserve policy may in the near future limit further increases in the value of this precious metal.
