Analysts expect sharp fluctuations in gold prices to continue in the near term as investors reduce risk exposure. The conflict involving Iran has heightened inflation concerns, weakened expectations of interest rate cuts, and added pressure to the global growth outlook, they noted. Over a longer horizon, however, they said gold’s status as a store of value is likely to regain prominence.
In early trading on Monday, gold fell to a four-month low of $4,098, coinciding with a steep decline in Chinese equity markets, the world’s largest gold consumer, which recorded their biggest drop in a year. Spot gold was last trading 2.5% lower at $4,377 per ounce, after recovering part of its losses following US President Donald Trump’s statement that any planned strikes on Iran’s energy infrastructure would be postponed.
Gold has dropped over 15% since US-Iran warSince the outbreak of the Middle East conflict on February 28, spot gold prices have declined by more than 15%. The metal has also pulled back roughly 20% from its all-time high of $5,594.82, which was recorded on January 29.
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