Gold prices fell in Thursday's trading session as market expectations of a possible monetary policy adjustment by the US Federal Reserve (Fed) changed, as investors awaited further clear signals related to efforts to cool down tensions in the Middle East.
Spot gold prices fell 1.2% to 4,420.77 USD/ounce at 4:36 PM Vietnam time. Gold futures for April delivery in the US fell 2.3% to 4,448 USD/ounce.
Mr. Ilya Spivak - Head of Global Macro Strategic at Tastylive said that the market is adjusting expectations about the policy response of central banks in the context of prolonged conflict.
According to CME Group's FedWatch tool, the market currently assesses a probability of about 37% of the Fed raising interest rates in December this year, while there are almost no longer expectations of interest rate cuts in the current period. Before the conflict broke out, investors had predicted that at least two interest rate cuts could occur in the year.
US President Donald Trump said Iran is hoping to reach an agreement to end nearly four weeks of fighting, while the Iranian Foreign Minister said that the country is considering a proposal from the US but has no plans to conduct exchanges to cool down the conflict.
Mr. Kyle Rodda - Senior Analyst at Capital. com said that in the next 24–48 hours, gold price movements are likely to continue to react to information related to the exchange progress between the parties.
According to Mr. Rodda, larger market fluctuations may appear early next week as it becomes clearer whether the US will deploy more forces on the ground.
White House spokeswoman Karoline Leavitt said President Donald Trump affirmed that the US would react more strongly if Iran does not accept the fact that it has "failed militarily".
Spot silver prices fell 2.7% to 69.36 USD/ounce. Platinum fell 2.3% to $1,874.90 an ounce, while palladium fell 2.5% to $1,387.53 an ounce.
