Gold prices fell again as investors assessed mixed information related to the conflict in the Middle East, in which the US postponement of Iran's energy facilities attack plan only helped the precious metals market have a short break after a recent period of strong correction.
Spot gold prices once fell by 1.8% after previously rising nearly 1% in a volatile trading session, mainly in the same direction as the stock market and in the opposite direction to oil prices. US President Donald Trump announced a 5-day postponement of the plan to attack Iranian power plants, and said there were "constructive" exchanges. However, Iran denied this information.
In the previous session, gold prices fell nearly 2%, marking the 9th consecutive session of decline. If this trend lasts for another session, this could become the longest series of declines in the history of precious metals.
Although the US announced the postponement of the attack plan, the prospects for exchanges and transportation through the Strait of Hormuz are still unclear. In addition, the restoration of the affected energy infrastructure is said to take longer, causing the market to continue to closely monitor new developments in the region.
Ms. Suki Cooper - Global Director of Commodity Research at Standard Chartered, said that the adjustment of gold prices in the current period is faster than usual. According to her, after periods of strong market fluctuations, it is not uncommon for gold prices to be under pressure for about 4-6 weeks, because precious metals are often used as a highly liquid asset in portfolio restructuring.
A similar development once appeared after the Russia-Ukraine conflict broke out in early 2022, when gold prices rose sharply in the short term before entering a prolonged correction phase in the context of investors reallocating portfolios.
Mr. Peter Kinsella - Global Foreign Exchange Strategy Director at Union Bancaire Privée (UBP) said that in periods of major volatility, investors tend to sell assets that are profitable to supplement capital for other positions under pressure.
Since the end of February, gold prices have fallen nearly 17%. Previously, the precious metal had experienced a prolonged period of increase thanks to the demand for diversification of reserves and the increasing trend of gold holdings by central banks in recent years.
Some countries that have strongly increased gold reserves are energy importers, so the increase in energy costs may affect resources for gold accumulation activities in the short term.
In this morning's trading session at 11 am Vietnam time, the world spot gold price was at 4,356.91 USD/ounce. Silver prices fell 3.3% to 66.81 USD/ounce, while platinum and palladium also simultaneously decreased. The Bloomberg Dollar Spot Index – a measure of the strength of the USD – increased by 0.2% after falling 0.4% in the previous session.
