Gold prices fluctuated sharply after the US launched more airstrikes, raising concerns about inflation and global interest rate outlook in the context of energy prices continuing to rise.
Spot gold prices at one point increased by 1.1% in a volatile trading session, reversing after once falling nearly 1% and retreating close to the 4,000 USD/ounce mark before that. As of 09:32 am Vietnam time, spot gold prices decreased by 4.38%, to 4,075.49 USD/ounce.
New developments in the energy market are causing investors to worry that inflationary pressure will continue to increase. High oil prices are increasing the possibility that central banks will maintain high interest rates for longer to control inflation - a factor that is not favorable for gold because precious metals do not bring yields.
According to newly released data, US inflation in May increased the most in more than three years. The consumer price index (CPI) increased by 0.5% compared to the previous month and 4.2% compared to the same period last year - the highest level since the beginning of 2023.
Pressure on gold continued to increase after the precious metal broke through the 200-day moving average (MA200) - an important technical threshold often tracked by institutional investment funds. This loss triggered further selling pressure in the market.
Mr. Robert Gottlieb – market advisor and former precious metal trader at JPMorgan Chase & Co. believes that the current developments reflect a downward trend in leverage and portfolio restructuring rather than a shift in the safe-haven role of gold.
“Continuous mixed news is increasing uncertainty, causing investors to tend to reduce risks and increase cash holdings in many asset groups,” he said.
On other precious metals markets, silver prices rose 1% to $63.96/ounce, while platinum and palladium also recorded slight gains. The Bloomberg Dollar Spot Index measuring the strength of the USD fell 0.1%.
