Gold prices were seen hovering around $4,500 entering the fifth consecutive trading day as oil prices surged on concerns about the spread of conflict in the Middle East.
At 10.10 am, gold prices were at $4,473, down 0.46% since they opened early Monday in Asian trading.
WTI crude oil prices jumped nearly 3% to above $102.50 in the opening session, reflecting renewed pressure on global energy markets and increasing concerns about a surge in global inflation.
Rising energy prices directly push up inflation expectations, thus putting pressure on central banks to keep interest rates high for longer or continue to tighten monetary policy. This environment typically reduces the appeal of non-yielding assets like gold.
At the same time, market sentiment continues to be weighed down by geopolitical risks in the Middle East. Reports indicate that the United States is considering a possible ground operation against Iran, raising concerns about a wider conflict.
According to a Wall Street Journal report, the Pentagon is expected to send around 10,000 additional troops to the region, a development that could potentially change the regional security landscape and directly affect the global energy supply chain.
Iran reacted strongly to the development through statements from its military officials, indicating that tensions are still at a high level and are at risk of escalating in the near future.
However, there were different signals from the diplomatic point of view when US President Donald Trump stated that negotiations with Iran were still going well and that an agreement could be reached in the near future.
The combination of rising oil prices, inflationary pressures, tight monetary policy and geopolitical uncertainties has made global markets remain cautious, with investors continuing to monitor the latest developments from the Middle East as the main driver of market direction.
