Gold prices almost went sideways on Tuesday as investors maintained cautious sentiment ahead of the deadline set by US President Donald Trump requiring Iran to reopen the Strait of Hormuz.
Spot gold rose slightly 0.5% to 4,679.q71 USD at 3:40 PM Vietnam time, while US gold futures for June delivery fell 0.2% to 4,676.50 USD per ounce.
Mr. Ilya Spivak - Global Macrostrategy Director at Tastylive - said that the market is in a state of waiting for results from the tough statements of the US President in recent days.
Meanwhile, Iran and Israel continue to attack each other, as Tehran resolutely refuses to reopen the Strait of Hormuz as well as not accept the early ceasefire agreement that Mr. Trump has put forward.
High oil prices are increasing concerns about global inflation. Although gold often benefits in an inflationary environment, high interest rates reduce the attractiveness of precious metals because they are non-performing assets.
Chairman of the US Federal Reserve (Fed) Cleveland branch Beth Hammack and Chairman of the Chicago branch Austan Goolsbee both believe that inflation is a bigger problem than the labor market, thereby strengthening the view of maintaining tight monetary policy.
The market is currently almost no longer expecting the Fed to cut interest rates this year.
Investors are awaiting minutes of the Fed's March monetary policy meeting scheduled to be released on Wednesday, along with important US inflationary indicators such as the personal spending index and consumer price index this week.
Although cautious sentiment still dominates geopolitical and inflationary factors, some experts believe that the upward outlook for gold prices is still maintained.
Mr. Spivak said that gold may return to a speculative upward trend like last year after current risk factors subside, with the possibility of prices approaching the range of 5,500 to 6,000 USD per ounce by the end of the year.
In other metals, spot silver fell 0.7% to $72.28 per ounce, platinum fell 0.8% to $1,964.24 per ounce and palladium fell 0.1% to $1,483.38 per ounce.
