Gold Stalls Amid Middle East Tensions, Rate Outlook Uncertainty
Gold prices held steady on Monday as investors assessed the latest developments in the Middle East and their impact on inflation and interest rates. The precious metal was little changed at $4,379.74 per ounce, having hit a one-week peak of $4,380.65 on Friday.
The tension between Iran and the US escalated over the weekend, with President Donald Trump warning that Iran would fail economically or face regime change if it didn't make a deal. The Iranian military responded by saying it would retaliate harshly to any fresh attack.
Market analyst Tim Waterer noted that gold's price movement is closely tied to oil and bond yields, and that a clear move lower in these assets is needed for gold to gain meaningful upside traction. He predicted that gold may trade in a range of $4,200 to $4,580 in the near term.
Oil prices slid on Monday as investors eyed a recovery in shipments from Saudi Arabia despite ongoing attacks by Yemeni Houthis. Central banks around the world are also raising interest rates to combat inflation, which tends to curb gold demand by making interest-bearing assets more attractive.