Gold declines 1% as fears of expanding conflict in the Middle East recede

Gold prices fell by more than 1% today, Monday, as waning fears of a widening conflict in the Middle East led to a decline in demand for safe havens, while traders awaited key inflation data in the United States that will be released later this week in search of indicators. About the direction of interest rates.

By 0716 GMT, gold in spot transactions fell 1.4% to $2,357.19 per ounce. US gold futures fell 1.8 percent to $2,371.

According to Reuters, Tehran downplayed the importance of the drone attack attributed to Israel on Iran, in what appears to be a step aimed at avoiding escalation in the region.

Prices rose to $2,417.59 in the previous session, a level not far from the record high of $2,431.29 recorded on April 12.

“Currently, there is an absence of catalysts to push gold prices higher,” said Kelvin Wong, chief market analyst for the Asia-Pacific region at OANDA. “At this point, it seems to us that the market is now coming to terms with the high cost of holding gold.”

However, he explained that the geopolitical risk premium remains positive in the medium to long term in the absence of indications of an imminent ceasefire in the conflict between Israel and the Palestinian Islamic Resistance Movement (Hamas).

The personal consumption expenditures price index, the Federal Reserve’s preferred measure of inflation, is scheduled to be released on Friday.

“Despite the growing likelihood of a weak, short-term pullback before the end of the second quarter, we expect gold and silver markets in the second half of 2024 to rise to $2,500 per ounce and $30-32 per ounce,” Citibank’s research unit wrote in a note.

Silver fell in spot transactions by 3.2 percent to $27.72 per ounce, platinum lost 0.6 percent to $925.70, and palladium fell 1.7 percent to $1,008.62.