Gold Prices Remain Stable Amid Global Market Uncertainty

Gold Prices Remain Steady Amidst War and Rising Oil Prices

The price of gold has remained steady at around $5,000 an ounce in recent days, despite concerns over the ongoing war in Iran and rising oil prices. The conflict, which began on February 28, has escalated across the region, sparking uncertainty about its impact on the global economy.

On Tuesday, spot gold was almost flat at $5,001.36 per ounce at 11:00 GMT. US gold futures for April delivery rose just 0.1 percent to $5,005.20. This lack of movement is surprising, given that gold prices typically increase during economic crises as investors seek safe havens.

In the past, when Russia launched its invasion of Ukraine, gold prices skyrocketed due to sanctions imposed by Western nations. However, in this case, traders may be anticipating a different response from the US Federal Reserve, which could lead to higher interest rates and make dollar assets more attractive.

Gold was already performing well at the start of this year, and some experts believe it is reacting less to the war due to its recent price increases. Additionally, a strong dollar provides an alternative safe-haven choice, and rising oil prices may lead to higher inflation, making the dollar more attractive.

Experts note that gold has become a speculative asset, and typical investors, including central banks, tend to be risk-averse and may have been spooked by its volatility in recent times. It is difficult to make predictions given the uncertainty in the Middle East, but for now, it seems that the biggest thing holding gold back from rising further is its already high price.

Two factors would need to happen for the price of gold to shift dramatically: a significant change in interest rates and a decrease in oil prices. Until then, the price of gold remains steady at around $5,000 an ounce.

Source: Al Jazeera