The price of gold edged higher as European trading got underway this Friday, rising above $4,500. Reports in the press point to a high probability that the US and Iran will extend the current ceasefire for 60 days, triggering a fall in oil prices and reducing expectations of further rate hikes. Brent crude touched a multi-week low, trading below $93 per barrel, amid hopes that disruption in the Persian Gulf may ease and that a realistic path towards full normalisation could emerge. Talks between the US and Iran have increased optimism that a longer-term agreement may eventually be reached. Lower energy costs are expected to alleviate inflationary pressures, reducing the hawkish expectations surrounding the Federal Reserve that have recently supported the US dollar and Treasury yields while weighing on the non-yielding precious metal. Against this backdrop, traders will continue to monitor developments surrounding the ongoing stand-off in the Strait of Hormuz closely. Any substantial progress reinforcing the prospect of normalisation in the Persian Gulf could create scope for further declines in energy prices, easing inflation concerns and reducing expectations of additional central bank tightening, a dynamic that could provide support for gold prices.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades (“AT”). The information does not contain a record of AT’s prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk. Forecasts are not guarantees. Rates may change. Political risk is unpredictable. Central bank actions may vary. Platforms’ tools do not guarantee success.