Gold, silver and platinum resumed recent losses on Monday, but rebounded strongly from earlier steep losses as renewed hopes for a de-escalation of the Iranian conflict emboldened investors.
price of spot gold It fell more than 5% to $4,262.50 on Monday morning, but recovered to trade at $4,412 by 11:40 a.m. London (7:40 a.m. ET).
The uproar followed President Trump’s announcement that the United States would postpone attacks on Iran’s energy infrastructure after “good and productive” talks between the two countries.
gold futures It was last down about 4% to $4,392, and was previously down almost 10%.
gold spot.
The yellow precious metal fell about 10% last week, its worst rally since September 2011. Spot gold is currently down about 25% since hitting a record high of $5,594.92 an ounce at the end of January.
spot silverMeanwhile, the stock fell 5.9% to $63.76, its lowest level this year and almost half of its $117 level on February 28, when the Iran war began. Although the intense selling seen in the early stages has eased slightly, silver futures Shares were still trading 8.3% lower at $63.98 on Monday.
silver futures.
The decline extends to other precious metals as well. platinum Futures plunged 9.7% to $1,780.20. palladium It fell 4.7% to $1,377.50.
The retreat from gold, traditionally seen as a key safe-haven asset during market turmoil, is consistent with the ongoing risk-off sentiment in markets as the Iran conflict raises concerns about inflation and rising energy prices.
Market strategists recently told CNBC that the prospect of higher interest rates as a result of the war could prompt investors to buy government bonds at the expense of lower-yielding precious metals.
But euro zone government bond yields rose again in early trading on Monday as the latest escalation in the conflict left investors with little hiding place.
As the Iran war continued to escalate on Monday, with US President Donald Trump issuing an ultimatum for Iran to reopen the Strait of Hormuz and Iran threatening buyers of US debt, Coin Bureau co-founder Nick Pucklin said this could end gold’s long bull run over the past year.
“The risk of war with Iran has only increased and what we are seeing is the ultimate flight to safety. This is exactly how a crowded momentum trade is coming to an end,” Pucklin said.
“What we are seeing in precious metals shows that central banks and Gulf states are leveraging the gold reserves they have built over the past few years. The focus is shifting from accumulation to capital preservation. This will put a natural ceiling on gold prices.”
