Gold prices continue to fall as escalating conflict in the Middle East increases the risk of energy supply and inflation, while the unexpected decrease in unemployment claims in the US also makes the prospect of interest rate cuts more distant.
The precious metal at one point fell by 1.6%, to nearly 4,600 USD per ounce, after losing 1.7% in the session before the long holiday. In a social media post, US President Donald Trump warned that he would impose a heavy blow on Iran if it did not reopen the Strait of Hormuz. Tehran rejected this ultimatum and continued attacks on energy infrastructure in the region, including many attacks on oil refineries and petrochemical facilities in Kuwait.
Meanwhile, the number of new jobs in the non-farm sector in the US in March increased the most since the end of 2024, according to data released by the US Bureau of Labor Statistics on Friday. This development may reinforce the US central bank's continued focus on inflationary risks, which are increasing due to rising oil prices, thereby reducing the possibility of interest rate cuts. Gold, which is a non-interest asset, often benefits in a low interest rate environment.
Increasing these concerns, the sharp increase in gasoline prices in the US will be clearly shown when important inflation data is released this week. Economists forecast that the consumer price index in March may increase by 1%, the strongest monthly increase since 2022. The conflict has caused gasoline prices to increase by more than $1 per gallon, while crude oil prices continued to rise again in the first session of the week.
Gold prices have fallen more than 12% since the conflict broke out at the end of February, when energy prices rose sharply, raising concerns about inflation and reducing expectations of interest rate cuts. Gold's safe-haven role has also been weakened as investors are forced to sell to offset losses in other markets.
Mr. Robert Gottlieb - Market commentator and former precious metal trader at JPMorgan Chase & Co. said that many investors are taking profits to protect their assets.
Gold prices are also affected by Mr. Trump's frequently changing messages about conflict, sometimes threatening to escalate attacks, sometimes signaling that war is about to end. The precious metal increased by more than 4% last week, but Thursday's decline ended a four-session winning streak.
Mr. Gottlieb said that as long as the messages are contradictory, gold prices will continue to fluctuate according to news headlines.
Mr. Trump said he would hold a press conference at 1 pm on Monday, and mentioned the deadline at 8 pm on Tuesday US Eastern time, but did not provide further details. Previously, on March 26, the US President set a 10-day deadline for Iran to reopen the Strait of Hormuz, which would end on Monday evening.
As of 9:32 Vietnam time, spot gold prices fell 0.3% to 4,661.14 USD per ounce. Silver prices fell 1.6% to 71.88 USD per ounce, while platinum fell and palladium remained almost unchanged. The USD strength index rose 0.1% after rising 0.3% in the previous session.
