Gold Price Volatility Continues as Geopolitical Tensions Rise
The gold price has been volatile in recent weeks, influenced by various market and economic factors. According to Vedika Narvekar, Research Analyst - Commodities & Currencies at Anand Rathi Shares and Stock Brokers, gold prices will continue to be impacted by data this week, while silver prices may remain more volatile due to their industrial exposure.
Last week, gold initially rebounded above $4,500/oz as softer US Treasury yields and a weaker dollar improved sentiment towards bullion. However, the recovery was short-lived after the August US payrolls report showed a significant increase in employment, signaling a more resilient labor market than expected. This led to a decline in gold prices.
This week, escalating Middle East tensions would traditionally be expected to trigger stronger safe-haven buying. However, instead of driving up gold prices, they pushed crude oil higher, reviving inflation concerns and strengthening expectations that US interest rates may need to remain higher.