Gold prices rose slightly in Tuesday's trading session thanks to cooling oil prices after a fragile ceasefire agreement between Israel and Iran, while investors continued to monitor inflation risks and US interest rate outlook.
Spot gold prices slightly decreased by 0.11% to 4,334.72 USD/ounce at 5:17 PM Vietnam time, after hitting a two-month low in the previous session. Gold futures for August delivery in the US also fell 0.1%, to 4,358.59 USD/ounce.
Mr. Tim Waterer – Head of Market Analysis at KCM Trade said that the temporary cooling of Middle East tensions has contributed to supporting gold prices through the diễn biến of the oil market.
The easing of tensions between Israel and Iran has somewhat helped cool down oil prices and thereby created more support for gold," he said.
Iran and Israel said they have ended attacks on each other after a call to cool down from US President Donald Trump. However, Tehran warned it would resume military action if Israel continued to attack Hezbollah in Lebanon.
Oil prices fell again, almost wiping out the strong increase recorded in the first session of the week.
Usually, high oil prices can increase inflationary pressure. Although gold is often seen as an inflation hedging tool, a high interest rate environment is detrimental to precious metals because gold does not bring yields.
In a newly released report, Goldman Sachs forecasts that the US Federal Reserve (Fed) will keep interest rates unchanged throughout 2026 and postpone interest rate cuts to 2027, citing that economic growth and the US labor market still maintain good resilience.
According to CME's FedWatch tool, traders are currently betting more than 70% on the possibility of the Fed raising interest rates before December this year.
Investors are now shifting their attention to the US consumer price index (CPI) data for May released on Wednesday to assess the monetary policy outlook of the Fed in the near future.
Mr. Tim Waterer believes that the possibility of gold returning to the 5,500 USD/ounce mark by the end of the year is still present, mainly thanks to gold buying demand from central banks. However, this will need support from the falling oil prices, bond yields and the USD.
On other precious metals markets, spot silver prices rose 0.4% to $68.45/ounce. Platinum prices rose 0.3% to $1,759.74/ounce, while palladium rose 1.5% to $1,223.44/ounce.
