Gold prices continue to be under pressure and trade below the psychological threshold of 4,000 USD/ounce as investors monitor mixed signals from the US and Iran ahead of new negotiations, while assessing the impact of Middle East tensions on inflation and interest rate prospects.
Spot gold prices fluctuated around $3,960/ounce after falling nearly 2% in the previous session. The US administration said negotiations with Iran are scheduled to take place on Tuesday in Doha. However, the Iranian Foreign Ministry affirmed that it will only send a delegation of experts to attend and rejected the possibility of direct dialogue with Washington.
In another development, Iranian Deputy Foreign Minister Kazem Gharibabadi said Tehran still plans to continue controlling maritime activities through the Strait of Hormuz. This view faces opposition from the US, Europe and Arab countries in the Gulf, showing that disagreements on the management of this strategic energy transport route have not been resolved.
Since the conflict broke out at the end of February, gold prices have fallen nearly 24% and at one point broke the $4,000/ounce mark last week. The upward momentum of energy prices due to war has raised concerns about prolonged inflation, thereby strengthening expectations that central banks will maintain high interest rates for longer - a disadvantage to gold because this precious metal does not yield yields.
New developments in the Middle East appear in the context of the US Supreme Court ruling that US Federal Reserve (Fed) Governor Lisa Cook will continue to be in office during the pursuit of a lawsuit related to President Donald Trump's efforts to impeach him.
This decision is seen as strengthening the independence of the Fed in the context that the agency is under pressure to lower interest rates, although some officials still leave open the possibility of continuing to increase borrowing costs to curb inflation. US inflation data released last week, although still at a high level, generally matched market forecasts.
By 9:23 am Vietnam time, spot gold prices fell 2.98% to 3,959.98 USD/ounce. Silver prices fell 1.72% to 57.28 USD/ounce. Platinum and palladium prices also went down, while the Bloomberg Dollar Spot Index increased slightly by 0.18% after three consecutive declining sessions.
