On March 11, global gold prices remained relatively stable. Rising oil prices increased inflation risks, which partly reduced market expectations for a rapid reduction in interest rates. This restrained further growth in the value of the precious metal. This was reported by Reuters.
The spot price of gold fell by 0.1% to $5,186.02 per ounce. At the same time, April futures in the United States lost 0.9% and fell to $5,194.10. Despite a slight decline, gold continues to hold well above the psychological level of $5,000.
An additional impact on the market was the recovery of oil prices after the previous decline. This again increased investor concerns about a possible acceleration of inflation. Market participants doubt that the record release of oil reserves will be able to completely cover the likely supply deficit. Against this background, expectations of a rapid rate cut have weakened, which traditionally limits a more active rise in gold prices.
At the same time, demand for the metal as a defensive asset supports the aggravation of the situation in the Middle East. Against the background of the military confrontation between the United States, Israel and Iran, investors are increasingly considering gold as a tool for preserving capital. Tensions in the region, including risks to the Strait of Hormuz, through which much of the world’s oil and liquefied natural gas passes, only reinforce these sentiments.
The attention of financial markets is now focused on the upcoming publication of the US consumer price index for February, as well as the PCE index, which is due on Friday. These figures may influence further decisions by the Federal Reserve, whose meeting ends on March 18.
The regulator is expected to leave rates unchanged. High yields on US government bonds and a strong dollar continue to put pressure on gold, but demand for it as a “safe haven” is holding back a deeper decline.
Against these developments, other precious metals also fell in price. Silver lost 1.4%, platinum — 1.2%, and palladium — 0.9%.
