Gold recovers from four-month low as oil falls after Trump postpones Iran strikes
Gold pared some earlier losses on Monday after U.S. President Donald Trump said he would delay any strikes on Iranian power plants and energy infrastructure.
By Reuters |
Gold pared some earlier losses on Monday after U.S. President Donald Trump said he would delay any strikes on Iranian power plants and energy infrastructure.
Spot gold was down 2.2% at $4,388.22 per ounce by 1230 GMT, extending losses into a ninth straight session. Before Trump's announcement, gold had fallen 8% at one point to a four-month low.
Gold has fallen about 17% since the Middle East conflict began on February 28, and has retreated about 22% from its record peak of $5,594.82 reached on January 29. Bullion recorded it's worst week in 43 years last week.
U.S. gold futures for April delivery fell 4.2% to $4,382.30.
"Despite having a pretty epic collapse in the early hours, we're seeing some bargain hunting coming in at the lower levels, driving the market back to roughly where it ended last week. So I suspect we've got some traditional, macro plays going on," said independent analyst Ross Norman.
Gold fell more than 8% earlier in the session, amid a strengthening dollar and growing expectations of U.S. rate rises. Rising energy prices due to the Iran war have stoked inflation fears and while gold is considered a long-term hedge against inflation, higher interest rates dim the non-yielding asset's appeal.
Oil prices fell more than 13% after Trump postponed strikes on Iranian energy infrastructure.
Trump said the U.S. has had good and productive conversations with Iran, while Iran's Fars news agency citing a source reported that there was no direct communication with the U.S. or through intermediaries.
Some analysts say the broader trajectory for gold could remain positive, with the metal up about 46% on a one-year basis.
"Once the dust settles and the current wave of forced selling runs its course, the outlook for gold in particular may improve again quite sharply," said Ole Hansen, head of commodity strategy, Saxo Bank, in a note.
Spot silver was up 0.6% at $68.16 per ounce and platinum fell 1.3% to $1,897.17. Both metals earlier hit their lowest levels since mid-December. Palladium climbed 3.6% to $1,454.64.
Spot gold was down 2.2% at $4,388.22 per ounce by 1230 GMT, extending losses into a ninth straight session. Before Trump's announcement, gold had fallen 8% at one point to a four-month low.
Gold has fallen about 17% since the Middle East conflict began on February 28, and has retreated about 22% from its record peak of $5,594.82 reached on January 29. Bullion recorded it's worst week in 43 years last week.
U.S. gold futures for April delivery fell 4.2% to $4,382.30.
"Despite having a pretty epic collapse in the early hours, we're seeing some bargain hunting coming in at the lower levels, driving the market back to roughly where it ended last week. So I suspect we've got some traditional, macro plays going on," said independent analyst Ross Norman.
Gold fell more than 8% earlier in the session, amid a strengthening dollar and growing expectations of U.S. rate rises. Rising energy prices due to the Iran war have stoked inflation fears and while gold is considered a long-term hedge against inflation, higher interest rates dim the non-yielding asset's appeal.
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Oil prices fell more than 13% after Trump postponed strikes on Iranian energy infrastructure.
Trump said the U.S. has had good and productive conversations with Iran, while Iran's Fars news agency citing a source reported that there was no direct communication with the U.S. or through intermediaries.
Some analysts say the broader trajectory for gold could remain positive, with the metal up about 46% on a one-year basis.
"Once the dust settles and the current wave of forced selling runs its course, the outlook for gold in particular may improve again quite sharply," said Ole Hansen, head of commodity strategy, Saxo Bank, in a note.
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Spot silver was up 0.6% at $68.16 per ounce and platinum fell 1.3% to $1,897.17. Both metals earlier hit their lowest levels since mid-December. Palladium climbed 3.6% to $1,454.64.
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