Gold edges higher as oil retreats; prices likely to stay volatile amid Iran tensions, says expert
Gold prices traded slightly higher on Monday after crude oil gave up most of its overnight gains, easing pressure on the precious metal, according to Praveen Singh, Head of Commodities at Mirae Asset ShareKhan.
“Spot gold is currently trading with a slight gain of 0.15% at $4,025 as crude oil prices have pulled back,” Singh said.
Crude oil had surged more than 3% overnight following an escalation in the US-Iran conflict after the US struck a nuclear site in Iran’s southwest and Iran attacked neighbouring countries, including a desalination plant in Kuwait. However, oil prices later retreated after Iran indicated that diplomatic talks with the US were continuing through intermediaries.
Singh noted that the US Dollar Index was marginally lower, while the two-year US Treasury yields edged up slightly.
He expects gold to remain range-bound in the near term, with prices reacting to developments surrounding the Iran conflict.
“Gold is expected to range trade as it reacts to Iran headlines. Outlook is still somewhat bearish due to rate hike fears; however, the metal is likely to be choppy,” he said.
He added that the US economic data calendar remains light this week, which may limit major directional cues for the market.
According to Singh, key support for gold is placed at $3,960 and $3,930, while resistance is seen at $4,050 and $4,115.
