Gold climbs after pause in US-Iran strikes eases oil prices and inflation fears
Gold has largely hovered around US$4,000 an ounce since late June, which some traders see as a key support level
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GOLD rose, after a pause in fighting between the US and Iran over the weekend eased oil supply risks and inflationary concerns.
Bullion rose as much as 1.1 per cent to near US$4,100 an ounce in early trading on Monday (Jul 27).
The US halted an almost two-week run of strikes against Iran without any explanation or announcement, while the Islamic Republic signalled it was refraining from retaliatory attacks and held talks with Oman to resolve the crucial issue of shipping via the Strait of Hormuz.
Oil tumbled at the week’s open, with global benchmark Brent falling more than 7 per cent to below US$90 a barrel in the initial few minutes.
Gold has largely hovered around US$4,000 an ounce since late June, which some traders see as a key support level. It is down by more than a fifth since the US and Israel launched strikes on Iran in late February, helping to end a multi-year bull run that had carried the metal to a record near US$5,600 in January.
After June’s interim ceasefire, the renewal of fighting in the Middle East had stoked inflationary pressures in recent weeks and increased the likelihood that the US Federal Reserve may raise interest rates, creating headwinds for non-yielding bullion.
Spot gold climbed 1 per cent to US$4,092.11 an ounce at 6.42 am in Singapore. Silver jumped 2.9 per cent to US$59.85 an ounce. Platinum and palladium also advanced. The Bloomberg Dollar Spot Index, a gauge of the US currency, was down 0.1 per cent. BLOOMBERG
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