Gold prices maintained highs in the trading session on June 17 as investors watched the progress of a temporary agreement between the US and Iran, while waiting for the first monetary policy decision of US Federal Reserve (Fed) Chairman Kevin Warsh.
Spot gold prices fluctuated around 4,330 USD/ounce after increasing by more than 6% in the last four sessions. This recovery helped gold regain some of the sharp decline recorded in recent months.
According to published information, details related to the temporary agreement between the US and Iran are gradually being clarified. The market expects the restoration of energy circulation to contribute to reducing global inflationary pressure.
US President Donald Trump said the Strait of Hormuz could be fully reopened on June 20. However, some observers still believe that the process of fully restoring transportation and energy operations may take more time.
In recent months, strong oil prices have increased inflationary pressure, forcing many central banks to maintain high interest rates or consider tightening monetary policy. This is a disadvantage for gold because the precious metal does not yield yields.
The focus of the market is currently shifting to the Fed policy meeting taking place during the day. This is the first meeting under the direction of Fed Chairman Kevin Warsh and is closely watched by investors to look for signals about interest rate prospects in the near future.
The market currently mostly forecasts that the Fed will keep interest rates unchanged. However, Mr. Warsh's statements and the new economic forecast update will have a major impact on gold trends in the short term.
Experts from Standard Chartered bank believe that the correlation between gold prices and real yields is becoming increasingly clear, showing that market attention is currently focused more on monetary policy than other short-term supporting factors.
According to Standard Chartered, the prospect of the US-Iran agreement may help gold prices soon establish a stable bottom. However, the market may still fluctuate strongly in the short term as gold fell below the 200-day moving average earlier this month.
As of 2:40 PM Vietnam time, spot gold prices slightly decreased by 0.1% to 4,331.08 USD/ounce. On other precious metals markets, silver prices almost went sideways at 70 USD/ounce after increasing by about 10% in the last four sessions. Platinum and palladium prices simultaneously decreased slightly, while the USD index decreased by 0.1%.
