Gold Slips as Traders Assess Prospects for U.S.-Iran Ceasefire
The precious metal fluctuated between positive and negative territory before easing toward $4,538 an ounce.
SEATTLE (Scrap Monster): Gold prices moved lower on Tuesday, giving back much of the prior session’s gains as investors continued to monitor diplomatic developments surrounding a possible ceasefire between the United States and Iran.
The precious metal fluctuated between positive and negative territory before easing toward $4,538 an ounce. President Donald Trump said on Monday that he had approved plans for a fresh round of attacks on Iran this week but opted to delay military action after appeals from three Gulf allies seeking additional time for nuclear negotiations.
Trump said leaders from Qatar, Saudi Arabia and the United Arab Emirates urged him to postpone the strikes because they believed a deal could still be reached with Iran that would be acceptable to Washington. Earlier, Axios reported that the White House viewed a proposal delivered by Iran through Pakistani intermediaries on Sunday as offering little meaningful progress.
At the same time, Treasury yields remained close to their highest levels in years as elevated energy prices continued to reinforce inflation concerns. Rising yields typically weaken demand for non-yielding assets such as gold. The dollar also strengthened by 0.2%, making bullion more expensive for holders of other currencies.
Gold has largely remained rangebound after tumbling during the initial phase of the conflict, as inflation worries were offset by expectations that slowing economic growth could prompt monetary easing. Since the war began, bullion prices have declined by nearly 14%.
The “fluidity with regards to the situation in the Middle East along with oil prices and bond yields” may still weigh on gold in the short term, said Vasu Menon, a strategist at Oversea-Chinese Banking Corp. “We continue to see gold as a useful hedge against global uncertainties given significant political and economic changes happening globally, which look set to gather pace in the coming years,” he added.
Spot gold fell 0.7% to $4,536.52 an ounce as of 1:35 p.m. in Singapore. Silver dropped 2% to $75.80, while platinum and palladium also traded lower.
Courtesy: www.uk.finance.yahoo.com