Gold price prediction: Why is gold not rising too much despite lower oil prices?
Sharp decline in oil prices is not helping precious metals much. (AI image) Gold price prediction today A consistent rise in gold prices due to
Sharp decline in oil prices is not helping precious metals much. (AI image) Gold price prediction today A consistent rise in gold prices due to drop in oil prices is being constrained by hawkish outlook from central banks which are signalling a possible rate hike to keep inflationary pressures in check, says Praveen Singh, Head Currencies and Commodities, Mirae Asset ShareKhan. Gold Performance On June 22, spot gold prices gained a mild upward traction on decline in oil prices coming on tentative positive developments surrounding the US-Iran talks. On June 22, the yellow metal traded between $4136 and $4221. However, it lost its momentum as the Dollar Index rose. Index rose. At the time of writing this article on Monday night, the metal was trading with a gain of 0.60% at $4186. Geopolitics and oil The US Vice President Vance, dismissing weekend rifts between the US's and Iran's negotiators, hailed the talks as quite positive. Both the countries are engaged in technical discussions over key issues like Iran's nuclear ambitions, sanctions, resolving the conflict, etc. as the sixty-day ceasefire period has started. These negotiations are aimed at securing a lasting peace deal in the Middle East. The talks reflect a possibility of Iran getting its frozen funds, though it is yet to be made explicitly clear. As per the Iranian foreign minister Aragchi, the mediators are said to have been able to ease some tension related to the Israel-Lebanon issue. Iran and the US have established a communication line to avoid miscommunications and mishaps related to the Strait of Hormuz traffic. Vance added that Iran has agreed to allow international inspection of its nuclear program, as under the Obama deal. As Israel's attacks on Lebanon remain a thorny issue, he said Monday that Israel, Hezbollah, Lebanon and other regional actors will participate in a newly established deconfliction mechanism aimed at preventing renewed escalation along Israel's northern border.
As per the US, the Strait of Hormuz remains open, though US officials have opposed any Iranian tolls. On the flip side, critics think that the Trump Administration may not secure a deal as good as Obama's nuclear deal reached in 2015. It is to be noted that IAEA inspectors have not been allowed to verify the state of Iran's enriched uranium since the US bombed nuclear sites last year. Inspections may begin as soon as Monday. However, according to Iran’s official IRNA news agency, Foreign Ministry Spokesperson Esmaeil Baghaei said Tehran has not accepted any new commitments. He added that any such commitments will continue in accordance with current procedures, subject to the approval of Iran's parliament and the decisions of the Supreme Security Council. US Treasury Secretary Scott Bessent said that the United States would waive sanctions on Iranian oil in exchange for the opening of the Strait of Hormuz and granting permission for International Atomic Energy Agency (IAEA) inspectors to enter Iran. Iran would be granted a 60-day temporary license to produce, deliver and sell Iranian oil. As per Tasnim, the semi-official news agency in Iran, Iran's policy of nuclear ambiguity is one of the most important assets, a collapse of this will serve only the enemy. Israeli PM Netanyahu said that Israeli troops in southern Lebanon have full freedom of action to thwart any direct or emerging threat to them or to the residents of northern Israel. IDF will remain in the security zone in southern Lebanon for as long as necessary to protect Israeli citizens. Crude oil prices fell yet again Monday. At the time of writing, Brent oil futures, on track of a third consecutive weekly loss, were down 3% for the day. Oil futures have collapsed 38% from the cycle high of $126.41 reached on April 30.
The BriefWire