New Delhi: Despite increasing geopolitical tension in the international market, the expected rise in gold prices is not being seen. Usually, during times of war, political crisis and economic uncertainty, investors consider gold a safe investment, but this time the picture is different. Investors are currently giving preference to the US dollar and other risk assets. The biggest reason for this is the fear of rising inflation and high interest rates for a long time.
Can gold return to bullishness after the current fluctuations?
Analysts believe that as geopolitical tensions and energy market shocks subside, investors will return to the old factors that have supported gold in the past years. Saxo Bank analyst Ole Hansen said, “Once the geopolitical situation stabilises and the energy shock subsides, investors will again focus on the structural themes that have supported the gold bull market.” Bullion watchers are still positive on the term. Tim Waterer, Chief Market Analyst at KCM Trade, says, “Gold can go up to 5,500 dollars by the end of 2026, if the circumstances favour it.
What should gold and silver investors see this week?
The market is now hinged on US economic data, especially jobs data. This will give an idea of the next step of the Federal Reserve. Kainat Chenwala, AVP Commodity Research, Kotak Securities, said, “This week the market will keep an eye on US job data, statements of Fed officials and comments of Treasury Secretary Scott Bennett.” Also said that developments in West Asia will remain an important driver for bullion prices.
What effect is the rise in oil prices having on gold?
Crude oil prices jumped more than 3% on Monday. This increased the fear that central banks will have to keep monetary policy tight to control inflation. High interest rates are harmful for gold because gold does not give any yield. Federal Reserve Vice Chair for Supervision Michelle Bowman said on Friday that the economic impact of the Middle East conflict could continue to increase inflation. For this, tight monetary policy may be required.
Why is gold falling despite geopolitical tension?
Traders are cautious about the latest developments. Iran said it targeted a US air base following attacks on Iranian military targets over the weekend. Iran’s Tasnim news agency also reported that Tehran’s team has blocked message exchanges with the US through intermediaries. “Spot gold remained volatile, quoted at 4,500 dollars an ounce on Monday, and silver moved towards 76 dollar an ounce. The precious metals started the week on a cautious note amid uncertainty over the US-Iran ceasefire framework,” said Kainat Chainwala.
What were the rates of gold and silver today?
Crude oil prices increased due to increasing tension in West Asia and the dollar strengthened. This put pressure on precious metals. In the international market, spot gold slipped nearly 1% to 4,504.97 an ounce. HDFC Securities Senior Analyst – Commodities Saumil Gandhi said, “On the weekend, renewed tension between America and Iran increased crude oil prices and strengthened the dollar. Due to this, gold started the week with weakness.”
