Gold prices rose slightly in the last trading session of the week as investors assessed new information related to the extension of the ceasefire between the US and Iran. However, the precious metal is still on track to record its third consecutive month of decline as concerns about inflation and high interest rate prospects continue to put pressure on the market.
As of 3:11 PM Vietnam time, spot gold prices increased by 0.35% to 4,517.86 USD/ounce. The day before, the precious metal had fallen to its lowest level in two months at 4,365.76 USD/ounce before recovering at the end of the session.
If the current level is maintained, gold prices will fall by about 2.4% this month and lose nearly 15% of their value in the past three months.
Meanwhile, US gold futures for August delivery rose 0.3% to 4,544.80 USD/ounce.
Mr. Brian Lan - CEO of GoldSilver Central said that gold's recovery momentum appeared after information related to the extension of the ceasefire between the US and Iran.
“Yesterday, gold prices fell to the 4,360 USD/ounce zone and are likely to continue to decline. However, information about the extension of the ceasefire order has caused the market to reverse very quickly. Currently, investors are still trading according to this development,” he said.
According to Mr. Lan, the market is currently waiting for the official agreement to be approved, although this document is still waiting for the final signature of US President Donald Trump.
Sources said that the US and Iran have reached an agreement to extend the ceasefire and ease restrictions on maritime transport activities through the Strait of Hormuz. However, the White House has not yet officially ratified the agreement, while Iranian state media affirms that the final terms have not yet been finalized.
On the energy market, oil prices fell more than 1% on Friday and are heading towards their strongest weekly decline since the beginning of April. This development partly helps ease concerns about inflation due to rising energy prices since the Iran conflict broke out.
However, the latest economic data shows that inflation in the US in April increased at the fastest pace in three years, reinforcing the view that the US Federal Reserve (Fed) may maintain high interest rates for longer than expected.
Although gold is often seen as an inflation hedging tool, a high interest rate environment is a disadvantage for precious metals because gold does not yield yields.
On other precious metals markets, spot silver prices slightly decreased by 0.1% to 75.55 USD/ounce. Palladium prices increased by 0.6% to 1,375.25 USD/ounce and are heading towards an upward week. Meanwhile, platinum prices decreased by 0.4% to 1,915.30 USD/ounce and are likely to close the week in red.
