Late afternoon yesterday, gold hit a two-week high as it pushed up to $4,765. This represented a gain of just under 6% from Monday’s low, just above $,500 per ounce. The precious metal then lost ground, dropping to $4,680 late on Thursday as the US dollar rallied on news of military action between the US and Iran in the Strait of Hormuz.
Since then, and after President Trump played down the incident, insisting that the ceasefire remained in place, the dollar retreated and gold rebounded. As midday approached in the UK, gold was trading quite comfortably above $4,700.
Source: TN Trader
As noted recently, this is a period when gold and the US dollar have a close, inverted correlation. This means that for now, much of gold’s behaviour will be directly linked to the back-and-forth in the US/Iran war.
While tensions remain elevated, investors appear hopeful that a broader peace agreement between the US and Iran can be reached. If they’re correct, then that should help to underpin gold prices over the short term. If not, then gold could suffer further selling pressure.
