Gold prices stabilize amid conflicting US statements on Iran
Kyiv • UNN
Investors are assessing the Middle East conflict amid White House denials. High inflation and the Pentagon's aggressive tone are limiting asset growth.
Gold prices show minimal fluctuations as investors try to assess the further course of the conflict between the US and Iran. As of Wednesday morning, the spot price of gold was fixed at $5,188.50 per ounce. This was reported by Bloomberg, writes UNN.
Details
Uncertainty prevails in the market due to discrepancies in official statements: the White House denied information about military escort of tankers in the Strait of Hormuz, which contradicts previous reports from the Ministry of Energy. This caused another jump in oil prices and increased the volatility of precious metals, which are traditionally considered a safe haven asset, but are now under pressure due to inflationary expectations.
Impact of the energy crisis on monetary policy
The rapid rise in energy prices is forcing traders to revise their forecasts for interest rate cuts by the US Federal Reserve. High inflation, which remained significant even before the start of hostilities, now makes it unlikely that the Fed will ease its policy in the coming months. Since gold does not yield interest income, the rising cost of borrowing limits its potential for appreciation, forcing investors to use bullion as a source of liquidity to cover losses in other sectors.
Current quotes and capital movement
The price of gold was fixed at $5,188.50 per ounce. Despite the overall increase in the value of gold since the beginning of the year, last week saw the largest sell-off of gold reserves in exchange-traded funds in the last two years – volumes decreased by almost 30 tons.
At the same time, silver showed a slight increase to $88.43, while platinum and palladium are trading in the red amid a strengthening US dollar.