Gold prices are seen to remain hovering around $4,700 for a long time as they lack support from market sentiment, market players are now more interested in the US dollar and high oil prices, and sparking inflation concerns.
At 9.25 am, gold prices were at $4,701, up 0.20% since it opened early Friday in Asian trading.
Geopolitical tensions between the United States and Iran have again escalated when US forces reportedly intercepted two Iranian oil tankers that were trying to evade sanctions.
The incident occurred as Washington continued to tighten control over Iranian shipping, while Tehran warned against ship movements in the Strait of Hormuz, a critical route for global trade.
On the same day, President Donald Trump issued a stern warning that Iranian infrastructure was at risk of attack if the country failed to stop its oil shipments.
At the same time, Iran denied any agreement to extend the ceasefire and accused Washington of violating its commitments by continuing to impose maritime sanctions.
In the commodities market, gold continues to be driven by oil price movements. Ole Hansen, head of commodity strategy at Saxo Bank, said rising energy costs maintain the risk of a stronger US dollar in the near term and continued inflationary pressures.
Oil prices have surged this week, reflecting concerns about global supply disruptions. The rise could increase inflationary pressures, making it harder for interest rate cuts.
While gold is often a safe haven during times of geopolitical uncertainty, its non-yielding nature makes it less attractive in a high-interest rate environment.
However, strong demand from central banks continues to support gold prices.
Emerging market countries such as China, Poland, India and Turkey are actively diversifying their reserves by reducing their reliance on the US dollar.
The People’s Bank of China (PBoC) reportedly added 5 tonnes of gold in March, extending its buying trend to 17 consecutive months, a clear sign that institutional demand remains the main driver of the precious metals market.
