Gold Recovers Amid US-Iran Peace Talk Hopes
The gold price experienced a rebound on Friday as news of potential peace talks between the US and Iran emerged, leading to a decline in oil prices.
This development provided a welcome respite for gold, which had fallen by approximately 23% since the US-backed war with Iran began in late February due to higher energy prices pushing inflation expectations higher.
The lower crude price led to a reduction in immediate inflation pressure on the bond market, causing the 2-year yield to dip to 4.311% and the 30-year to back off to 5.14%, although these levels are still elevated.
Tai Wong, an independent metals trader, observed that gold appears to be building a base around $3,950 despite the rise in yields, while ING attributed the recent strength in gold to dip-buying and short-covering after the correction from record highs.