Khaberni - Gold prices fell today, Friday, with the rise of oil, which heightened inflation fears and the continuation of high interest rates for an extended period, against the background of stalled negotiations between the United States and Iran.
By 11:00 Moscow time, the spot gold price decreased by 0.11% to $4689.50 per ounce, and the precious metal has lost 3% since the beginning of the week after gaining for four consecutive weeks.
The U.S. futures contracts for gold for June delivery fell by 0.41% to $4704.66.
As for other precious metals, the spot price of silver decreased by 0.5% to $75.07 per ounce, platinum lost 0.7% to $1991.72, while palladium rose by 0.1% to $1469.04.
Market chief analyst at "Oanda" Kelvin Wong stated that the continued risk of a prolonged closure of the Strait of Hormuz keeps oil prices at high levels, which exerts pressure on gold prices.
He explained that the rise in oil prices could lead to accelerated inflation as a result of increased transportation and production costs, which enhances the likelihood of central banks raising interest rates.
Although gold is traditionally considered a hedge against inflation, the rise in interest rates enhances the attractiveness of yield-generating assets, reducing the demand for the yellow metal, and he added that everything now depends on what happens in the Middle East.
Iran had demonstrated, on Thursday, its control over the strait by publishing a video showing special forces aboard a speedboat raiding and boarding a cargo ship, following the collapse of the talks that Washington was relying on to reopen one of the world's most important shipping lanes.
For his part, Donald Trump told reporters that he believes Tehran is eager to reach an agreement, although its leadership is facing internal turmoil. He added that he is not in a hurry to reach an agreement, but he warned, saying: If Iran does not want that, I will end it militarily.
The yields on U.S. Treasury bonds for 10 years rose by about 2% during the week, increasing the alternative cost opportunity of holding gold, which does not generate a yield.
