It had been falling for a long time: Sharp volatility in gold
The sudden fluctuations in the gold market in recent days are drawing the attention of investors due to the rising tension between Iran and the US. With the latest developments, new price levels have emerged for gold and other precious metals.
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Following the United States' completion of its recent strikes against Iranian targets, financial markets have experienced a volatile trend. In a statement made after the attacks, President Donald Trump claimed that Iran was slowing down the process in interim peace talks. However, the mutual attacks that resumed shortly after led to a further escalation of tensions.
The Tehran administration, meanwhile, announced that it has closed the strategically important Strait of Hormuz to all international shipping traffic. This step caused a significant disruption in the global energy flow and brought about a rapid increase in oil prices. The rise in energy prices has brought the possibility of interest rate hikes by central banks to combat inflation back onto the agenda.
In the US, inflation figures clearly revealed the economic impact of the war. According to data released in May, the Consumer Price Index showed a monthly increase of 0.5 percent and an annual increase of 4.2 percent, marking its fastest rise since the beginning of 2023.
Gold prices were also significantly affected by these developments. In international markets, spot gold rose 0.6 percent to $4,097.73 per ounce as of 10:05 Singapore time. Prices for gram gold, quarter gold, and Republic gold also experienced fluctuations in the domestic market. Following gold's loss of more than 4 percent in value the previous day, investors are monitoring new equilibrium levels.
While silver rose 1 percent to $63.96 in recent hours, gains in value were also observed in platinum and palladium. On the other hand, the Bloomberg Dollar Spot Index indicated a slight decline of 0.1 percent in the dollar's global value.