Gold steadied after posting the biggest decline in two months with the U.S. and Iran appearing to be step back from a deeper military conflict, denting the appeal of haven assets. Palladium continued its meteoric rise to a record.
President Donald Trump defended on Wednesday the U.S. strike on a top Iranian general that sparked a missile barrage on American bases in Iraq and said he would impose new sanctions on Tehran -- but also offered the country’s regime a diplomatic opening. Investors are betting that the conflict can be contained and prices dropped following a surge above $1,600 an ounce when the news of the missile attacks first broke.
The retreat may prove to be a minor setback for the precious metal, which is still up 2.8% this year, building on the 18% gain in 2019. Investors are weighing lower interest rates that have reduced the opportunity cost of holding gold, while trade-war related risks still exist as progress beyond the phase one deal is still in question. On Friday, traders will get the latest read on the health of the U.S. economy with the nonfarm jobs report.
Spot bullion climbed 0.2% to $1,559.20 an ounce at 9:27 a.m. in Singapore, after a 1.1% drop on Wednesday, the most since Nov. 7. Prices had earlier hit $1,611.42 yesterday after the Iranian attack, the highest level since 2013.
Palladium surged to an all-time high of $2,148.81 an ounce, driven by a combination of fundamentals -- strong consumption from carmakers and tight supplies.
Source : Bloomberg