Gold falls following Fed decision, while war in Iran intensifies market pressure
Kyiv • UNN
The price of gold dropped to $4,550 due to the Fed's decision and the war in Iran. Brent crude rose to $118, while silver and platinum are showing growth.
Gold prices are declining for the third consecutive session following the U.S. Federal Reserve's decision to keep interest rates unchanged amid uncertainty caused by the war in Iran. This was reported by Bloomberg, according to UNN.
Details
At the start of trading, the price of gold was around $4,550 per ounce, having fallen by 3.4% over the three previous sessions. Overall, since the start of the war in late February, prices have dropped by approximately 14%.
At the same time, silver, platinum, and palladium are showing growth.
Fed Decision and Market Reaction
The Federal Reserve left rates unchanged; however, the decision was accompanied by a split among the leadership. Four representatives dissented, marking the first such instance since 1992.
Markets reacted with an increase in U.S. Treasury yields, particularly two-year notes, which intensified pressure on gold as a non-yielding asset.
Analysts note that amid inflationary risks, expectations of a possible rate hike are growing, which negatively impacts demand for precious metals.
The idea of a Fed rate hike is an underappreciated new factor for gold
Impact of the War
Additional pressure is being created by the war in Iran, which is now in its ninth week. Due to the blockade and energy supply disruptions, Brent crude oil prices have exceeded $118 per barrel.
U.S. President Donald Trump stated that the blockade of Iranian ports will continue to force Tehran back to the negotiating table.
Analysts believe that the combination of geopolitical tension and tighter monetary policy is creating additional pressure on the gold market.