Gold prices edged higher as European trading got underway and are currently sitting just below the $4,700 level. Despite the ongoing geopolitical and economic uncertainty, with the US and Israel’s war in Iran threatening to escalate following the latest threats from the US President, the precious metal has remained broadly flat since the beginning of April, after losing more than 13% during the previous month. The war has caused spikes in oil and gas prices, fuelling inflation fears and raising the prospect of restrictive monetary policy from central banks. This dynamic has resulted in higher bond yields and, in particular, has strengthened the US dollar because of its safe-haven appeal. As a result, the precious metal is likely to continue trading within a relatively narrow price range, caught between the support offered by ongoing uncertainty and the pressure created by the strong dollar and higher yields.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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