In the realm of precious metals, gold experienced a modest uptick on Tuesday, lingering in close proximity to its record-high levels. This ascent was attributed to mounting apprehensions surrounding escalating tensions in the Middle East, compelling investors to seek refuge in the venerable safe-haven commodity.
At 0103 GMT, spot gold saw a marginal increase of 0.1%, settling at $2,383.37 per ounce. Last Friday, bullion had achieved an unparalleled pinnacle of $2,431.29.
Simultaneously, U.S. gold futures advanced by 0.7% to reach $2,400.00 per ounce.
The geopolitical landscape bristled with anticipation as Israelis awaited Prime Minister Benjamin Netanyahu’s response to Iran’s inaugural direct assault on their nation. International pressure mounted for restraint amidst apprehensions of a potential escalation of strife in the volatile Middle Eastern region.
Concurrently, in the economic sphere, March witnessed a notable surge in U.S. retail sales, surpassing expectations. This surge was primarily driven by a substantial uptick in transactions at online retailers, further substantiating the resilience of the economy as it concluded the initial quarter on a robust note.
Mary Daly, President of the San Francisco Federal Reserve Bank, underscored the absence of immediate necessity for interest rate cuts. Daly cited the prevailing strength of the economy and labor market, coupled with inflation rates persistently surpassing the Federal Reserve’s 2% target, as rationale for maintaining current interest rate levels.
It’s worth noting that heightened interest rates tend to diminish the allure of holding non-yielding assets like gold.
The trajectory of U.S. economic growth assumes a pivotal role in sustaining the ongoing global expansion. However, potential ramifications stemming from sustained inflationary pressures and stringent monetary policies pose new challenges to the anticipated “soft landing” on a global scale.
In another development, the State Bank of Vietnam unveiled plans to recommence gold bar auctions following an 11-year hiatus. This strategic move is geared towards bolstering the supply of precious metals within the market.
In the wider spectrum, spot silver observed a marginal decline of 0.1%, settling at $28.86 per ounce, while platinum experienced a modest increase of 0.8%, reaching $969.70. Conversely, palladium witnessed a decline of 0.8%, concluding at $1,027.06 per ounce.