Gold was little changed following a modest two-day gain, as investors assessed the deadlock in the Middle East conflict, and swings in Asian stock markets ahead of a key US inflation report.
Bullion for immediate delivery traded near $4,726 an ounce, paring earlier gains. President Donald Trump on Monday derided Iran’s response to a US peace proposal, and said the fragile ceasefire in the Strait of Hormuz was on “massive life support,” offering no quick end to the conflict.
In equity markets, South Korean shares — which have led gains in the region recently — fell more than 5% before recovering some ground. The drop came after a local policymaker said the nation should pay citizens a “dividend” using taxes on AI profits, before clarifying the remarks.
Gold has had a volatile year, hitting a record in late January, before retracing some gains. The precious metal has struggled since the outbreak of the war in the Middle East as elevated oil prices have fanned concerns central banks may maintain rates, or even raise them, to contain the inflationary fallout. That stands to be headwind for bullion as it does not pay interest.
Gold’s “price action reinforces how it is still trading less like a straightforward safe-haven and more as a macro risk proxy that is caught between oil/inflation, Fed-pricing, USD dynamics and risk sentiment,” said Christopher Wong, a strategist at Oversea-Chinese Banking Corp. USD refers to the greenback.
Silver was little changed, after surging more than 7% on Monday following a report on a liquidity crisis for a state-owned oil firm in Peru. The country is one of the biggest silver producers.
Trump’s comments on Iran came ahead of a key US inflation report on Tuesday. Economists expect a sharp rise in the consumer price index as the Middle East was triggers price surges that are rippling through manufacturing and farming.
Spot gold slipped 0.2% to $4,726.09 an ounce at 12:37 p.m. in Singapore. Silver was up 0.2% to $86.25. Platinum and palladium fell. The Bloomberg Dollar Spot Index was 0.2% higher.
This article was generated from an automated news agency feed without modifications to text.
