After US President Donald Trump postponed military strikes on Iranian infrastructure, gold recovered from a four-month low on Monday, but prices were still down for a ninth session in a row as predictions on higher interest rates reduced the metal’s appeal.
After dropping more than 8% earlier to a session low of $4,097.99, spot gold fell 0.9% to $4,448.32 per ounce by 1314 GMT. On Friday, it recorded its worst weekly performance since 1983. Expectations of rising interest rates were a major factor in the overnight sell-off, which was a continuation of the lengthy liquidation we’ve seen over the previous few sessions. Following Trump’s post on Truth Social, there was a stunning reversal. According to David Meger, director of metals trading at High Ridge Futures, the headline caused significant reversals in a variety of commodities, including metals, energy, and stocks.
Recently, betting on rates remaining higher for longer have surged due to higher energy prices brought on by the conflict in Iran. Despite its image as a safe haven and inflation hedge, gold has not reaped the benefits, as high rates increase the opportunity cost of storing the non-yielding metal.
Trump stated that he will delay any strikes on power plants and energy infrastructure because the US and Iran have had fruitful negotiations. He said on social media that talks with Iran will go on all week.
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