Analysts say that Treasury yields, the US dollar, oil prices, and whether tensions in the Strait of Hormuz escalate or de-escalate are currently the most important indicators for gold investors
Dubai gold prices eased on Tuesday morning after the US Treasury Secretary threatened an “economic onslaught” against countries doing business with Iran.
The 24K and 22K variants was trading at Dh557.5 and Dh516.25 per gram, respectively, at the market open on Tuesday, both losing Dh0.5 from the close of the market on Monday. Among the other variants of the precious metal, 21K, 18K, and 14K, were trading at Dh495, Dh424.25, and Dh331, respectively.
Globally, spot gold was trading at $4,637.85 per ounce, down 0.01 per cent, easing from yesterday’s highs. Silver lost 0.80 per cent, trading at $68.02 per ounce.
Analysts say that real Treasury yields, the US dollar, oil prices, sanctions developments, and whether tensions in and around the Strait of Hormuz escalate or de-escalate are currently the most important indicators for investors.
Naeem Aslam, CIO of Zaye Capital Markets, said that immediate market focus is turned to the Treasury Secretary’s comments on Monday.
“A more restrictive or confrontational message could strengthen safe-haven demand for gold, particularly if it increases fears around Iran, oil flows or wider geopolitical escalation,” he said.
Aslam added that a calmer message could potentially reduce some of that risk premium, but the precious metal may still be supported should real yield do not rise materially.
The key questions now rests on whether gold as a safe-haven demand can outweigh pressure from strong US growth and higher yields. “If geopolitical risk intensifies while the dollar and real yields soften, gold could remain well supported above the US $4,600 area and retest recent highs,” he said.
“If trade tensions ease and strong services activity pushes yields higher, gold could consolidate without necessarily breaking its broader uptrend. The most important indicators for investors are now real Treasury yields, the U.S. dollar, oil prices, sanctions developments, and whether geopolitical tensions around the Strait of Hormuz escalate or ease.”
Source: Khaleejtimes
