By Anushree Ashish Mukherjee
Full article posted on www.reuters.com
Gold prices edged lower on Monday, pressured by a strong U.S. dollar, while investors monitored geopolitical risks following recent U.S. military actions against Iranian nuclear facilities.
Current Gold Price Overview
Spot Gold: Declined by 0.2% to approximately $3,359.99 per ounce (0820 GMT).
U.S. Gold Futures: Dropped by 0.3% to around $3,375.20 per ounce.
Key Drivers of Gold Prices
Firm U.S. Dollar: The dollar rose 0.4% against other currencies, making gold more expensive for international buyers and limiting demand.
Geopolitical Uncertainty: Tensions between Iran and the U.S. escalated significantly following airstrikes and missile exchanges, heightening investor caution and underpinning market volatility.
Energy and Interest Rates: Rising energy prices due to geopolitical instability could potentially delay anticipated Federal Reserve rate cuts, reinforcing the dollar’s strength and pressuring gold.
Expert Insights
Ole Hansen, head of commodity strategy at Saxo Bank, noted, “Continued geopolitical uncertainties will likely prevent significant corrections in gold prices, maintaining support levels.”
Economic and Central Bank Outlook
Recent geopolitical events coincide with a critical week of economic data releases and central bank statements, including upcoming Congressional testimony by Federal Reserve Chair Jerome Powell. Investors anticipate possible rate cuts of up to 50 basis points by year’s end, starting in October. Such low-interest-rate environments typically support higher gold prices.
Other Precious Metals Movements
Silver: Rose by 0.4%, reaching $36.12 per ounce.
Platinum: Increased by 2.3%, trading at $1,293.90 per ounce.
Palladium: Gained 2.5%, reaching $1,070.33 per ounce.
CPM Group recommends investors maintain a watchful approach, closely tracking currency fluctuations, geopolitical developments, and central bank announcements to effectively navigate market volatility.
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