(Sept 21): Gold prices were little changed on Monday as market participants assessed developments in the Middle East and their implications for inflation and interest rates.
Spot gold was nearly steady at US$4,379.74 per ounce, by 0027 GMT after hitting a one-week peak on Friday.
US gold futures for December delivery were down 0.1% at US$4,419.40.
Iran and the United States exchanged new threats, with President Donald Trump warning Iran would fail economically or face its leadership being wiped out if it didn’t make a deal, and the Iranian military saying it would retaliate harshly to any fresh attack.
“The focus remains on geopolitics, oil and the reaction in bond yields. For gold to gain meaningful upside traction, a clear move lower in oil and/or bond yields is likely required,” said Tim Waterer, chief market analyst at KCM Trade.
“Gold may trade in a roughly US$4,200 to US$4,580 range in the near term.”
Oil prices slid as investors eyed a recovery in shipments from Saudi Arabia despite ongoing attacks by Yemeni Houthis that have escalated tension.
The prospect of a new global interest rate-tightening cycle is coming into view as some of the world’s top central banks raise rates and signal more may be needed to tame inflation fuelled by the Iran war.
The Bank of Japan became the latest big central bank to tighten on Friday, following rate increases by the Federal Reserve earlier that week and the European Central Bank the week before.
Minneapolis Fed president Neel Kashkari said that inflation is too high across all sectors of the US economy.
Though gold is often seen as an inflation hedge, rising rates tend to curb its demand by making interest-bearing assets more attractive.
Among other metals, spot silver rose 0.8% to US$66.76 per ounce, platinum gained 0.2% to US$1,804.33 and palladium added 0.7% at US$1,311.65.
Uploaded by Magessan Varatharaja