Gold and Silver Prices Experience Fluctuations Amid Geopolitical Tensions

SadaNews - Gold stabilized after a two-day decline, as investors continue to focus on the talks between the United States and Iran, while the closure of the Strait of Hormuz continues to raise inflation risks.

The price of the precious metal reached approximately $4,601 per ounce, after declining by 2.4% during the previous two sessions to its lowest level in nearly four weeks.

U.S. President Donald Trump stated that Iran requested the United States to lift the maritime blockade on the Strait of Hormuz, while both sides are negotiating to end the two-month-long war that has disrupted global energy supplies. Brokers in Pakistan expect Tehran to present a revised proposal in the coming days, according to CNN.

Traders are monitoring interest rate decisions in the United States, the European Union, the United Kingdom, and Canada in the coming days. On Tuesday, the Bank of Japan kept the benchmark interest rate unchanged at 0.75%, with a split in the voting indicating an increasing likelihood of a rate hike in June.

The Federal Reserve is widely expected to keep interest rates unchanged at its meeting ending on Wednesday, according to Bloomberg Economics, while investors are also watching to see if Jerome Powell will remain on the board after his term as chairman ends.

Inflation risks are increasing due to the energy supply shock, raising the chances that central banks will keep interest rates high for longer or even raise them, which puts pressure on gold that does not yield a return. Additionally, rising bond yields have increased the opportunity cost of holding the metal.

Gold has lost about 13% of its value since the conflict began at the end of February, while oil prices have surged.

Technical Factors Pressuring Prices

Olli Hansen, head of commodity strategy at Saxo Bank, said: "Some technical selling emerged after breaking the recent support level near $4,650."

He added: "The immediate focus of the market remains on mediation efforts, as reopening the strait and the subsequent drop in oil prices represent the biggest short-term positive catalyst for the metals."

The spot gold price fell by 0.2% to $4,589.04 per ounce at 7:38 AM in Singapore. Silver rose by 0.1% to $73.13 per ounce, while the prices of platinum and palladium saw little change. The Bloomberg dollar spot index, which measures the performance of the U.S. currency, also remained stable.

Silver Price

The silver ounce recorded around $73 per ounce.