Business Recorder
NEW YORK: Gold prices were down on Monday after falling to a one-week low earlier in the session, as the dollar and oil prices climbed on Iran’s threat of retaliation in response to the US takeover of an Iranian cargo vessel. Spot gold was down 0.3percent at USD4,818.03 per ounce, as of 9:23 a.m. EDT (1323 GMT), after hitting its lowest price since April 13 earlier in the session. US gold futures for June delivery fell 0.8percent to USD4,839.10. The US dollar rose to its highest level in a week before paring gains to trade up 0.1percent, as renewed US-Iran tensions caused uncertainty in markets about the chances of a peace deal. Benchmark 10-year US Treasury yields gained, increasing the opportunity cost of holding non-yielding bullion. “The situation in the Middle East has clearly intensified again, shifting our gold forecast tilted slightly to the downside amid increased risks of another sharp spike in oil prices, which could result in a higher dollar and bond yields,” said Fawad Razaqzada, market analyst at City Index and FOREX.com. A ceasefire between the US and Iran appeared in jeopardy on Monday after the takeover of the cargo ship. Oil prices jumped around 5percent on fears the ceasefire would collapse, and as flows through the Strait of Hormuz remained largely halted. Though gold is considered an inflation hedge, demand for the non-yielding asset is dampened when global interest rates are high. Rates could remain higher for longer as a result of heightened inflation due to the war in the Middle East. “Gold traders on this day are choosing the bearish daily elements (higher dollar, yields) for the metals. Technically, June gold futures bulls’ next upside price objective is to produce a close above solid resistance at USD5,000,” Jim Wyckoff, senior analyst at Kitco Metals, said in a note. Among other metals, spot silver lost 0.8percent to USD80.18 per ounce, platinum fell 1.2percent to USD2,077.35, and palladium was down 0.3percent at USD1,554.48 after touching a one-week low earlier.
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