Gold Nears $4,403 as Oil Tops $100 Amid US-Iran Tensions
Gold prices neared $4,403 as tensions between the US and Iran escalated on Wednesday. The escalation led to a rise in oil prices, which hit $100 per barrel for Brent crude. This environment typically weighs on non-yielding assets like gold, but the metals saw an increase due to safe-haven demand.
The US dollar weakened against major currencies, making gold and silver cheaper for buyers holding other currencies. However, Treasury yields remained elevated at 4.81%, a headwind that usually pressures gold and silver prices.
The setup for metals is mixed, according to analysts. Higher crude prices and yields typically weigh on gold and silver, but the weaker dollar, safe-haven demand, and uncertainty over Gulf oil supply are offsetting this pressure.
Gold's near-term direction now hinges almost entirely on Thursday's and Friday's inflation data, with traders saying a hotter-than-expected reading would likely keep yields elevated and cap the metals' rally.