Gold market stagnant amid uncertain ceasefire: Eyes on US inflation figures
The lack of clarity regarding ceasefire negotiations between the US and Iran has caused the gold markets to remain in a wait-and-see mode. Investors are acting cautiously ahead of critical inflation data to be released in the US.
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Gold prices began the fourth day of the week with a flat trend in the shadow of geopolitical developments. In particular, the ongoing tension in the Middle East continues to be one of the determining factors in pricing.
Spot gold showed limited change at levels around 4,720 dollars per ounce. US gold futures for June delivery declined by 0.8 percent to 4,736.50 dollars.
In Turkey, the price of gram gold started the morning at the level of 6,756 liras.
GoldSilver Central Managing Director Brian Lan stated, "Speculation continues regarding developments after the ceasefire. Gold is not currently giving a clear signal of movement." Lan added that gold prices are expected to consolidate between 4,607 and 4,860 dollars in the near future.
Tensions on the Middle East front escalated, especially after Israel carried out its heaviest attacks to date against Lebanon. While hundreds of people have lost their lives as a result of the attacks, Iran's potential threats of retaliation are reducing risk appetite in the markets.
In recent days, a rise in oil prices has also been noticeable. According to experts, concerns that supply from the region will not fully recover despite the ceasefire have supported oil prices.
WHAT WILL BE THE DIRECTION OF THE GOLD MARKET?
Following the military activity between the US-Israel and Iran that began on February 28, spot gold experienced a value loss exceeding 10 percent. Along with rising energy prices, inflationary pressure has led to a reshaping of expectations regarding the Fed's interest rate policy. Gold is generally considered more attractive in low-interest environments because it does not provide interest income.
In the minutes of the US Federal Reserve's (Fed) March meeting, it was emphasized that additional interest rate hikes could be brought to the agenda if inflation maintains its course above the 2 percent target. The inflationary pressure created by the tension in the region is seen as supporting this possibility.
In financial markets, eyes have turned to today's US personal consumption expenditures (PCE) data, as well as the March inflation rate to be released on Friday. These data will provide new signals regarding what kind of monetary policy the Fed will follow in the coming period.
In a newly published assessment by Standard Chartered, it was stated that despite short-term fluctuations, rising geopolitical risks in the region strengthen the possibility that gold could begin to gain value again in the coming months.
In addition to gold, selling pressure also dominated other precious metals. Spot silver fell 0.5 percent to 73.71 dollars per ounce, platinum declined 0.6 percent to 2,017.26 dollars, and palladium dropped 0.4 percent to 1,549.18 dollars.