Key Takeaways
Gold prices held nearly steady on Monday as investors assessed the ongoing conflict between the U.S. and Iran, with spot gold trading at $4,669.13 per ounce as of 9:26 a.m. ET.
"Focus is likely to remain on the war and interest rates. If the conflict drags on, oil will grind higher amid tightening supply conditions, adding to inflationary pressures," Bart Melek, global head of commodity strategy at TD Securities, said.
The market's caution comes as a U.S. deadline for a deal with Iran approaches. While gold typically acts as a hedge against geopolitical instability, the prospect of rising oil prices and persistent inflation creates a complex outlook. Higher inflation could limit the Federal Reserve's ability to ease monetary policy, making non-yielding assets like gold less attractive. U.S. gold futures rose 0.3% to $4,694.20 per ounce.
Gold prices have been sensitive to interest rate expectations, and the market now sees no chance of a Fed rate cut this year, according to CME’s FedWatch tool. Investors are looking ahead to the release of the Fed’s March meeting minutes on Wednesday, followed by key U.S. Personal Consumption Expenditures (PCE) and Consumer Price Index (CPI) data later in the week for further direction.
Other precious metals saw modest declines. Spot silver fell 0.4% to $72.67 per ounce, while platinum lost 1% to $1,969.81 and palladium was down 1% at $1,488.58. The price of oil, a key driver of inflation expectations, fell in choppy trading but has risen sharply since the conflict began five weeks ago.
This article is for informational purposes only and does not constitute investment advice.
