Gold Rebounds on Easing Middle East Tensions, Oil Price Plunge

Gold prices are rebounding from near-yearly lows as international oil prices plummet following a de-escalation in military conflict between the United States and Iran. The Korea Exchange reported that spot gold on the KRX gold market rose 1.26% to ₩192,210 (approximately $131.16) on February 27th, reclaiming the 190,000 won level.

The rebound marks a complete reversal from just days earlier when oil prices surged above $100 per barrel and pushed U.S. 10-year Treasury yields above 4.7%, highlighting the possibility of further Federal Reserve rate hikes.

Hwang Byung-jin, head of FICC Research at NH Investment & Securities, explained that 'Amid persistent high oil price burdens stemming from Middle East tensions, short-term gold prices have formed a strong negative correlation with international oil prices.' A downward stabilization in oil prices alleviates headwinds for the gold market and is perceived as a bargain-buying opportunity.