Metal prices decline this Monday as investors study the decline in the escalation of geopolitical tensions, while appetite leans towards stocks and other assets considered riskier.
Stock futures rose on Monday, with those for the S&P 500 ES00, +0.58% up 0.5% and those for the Nasdaq Composite NQ00, +0.68% up 0.6%.
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Gold is heading for its biggest single-day drop since December as geopolitical concerns ease. Metal prices decline this Monday as investors study the decline in the escalation of geopolitical tensions, while appetite leans towards stocks and other assets considered riskier.
Gold, based on continuing prices, falls $39.50, or 1.6%, to $2,374.50. That percentage drop is the largest one-day decline since Dec. 4, 2023, when the contract fell 2.3%. Gold for April delivery, GCJ24, set a new record close on Friday, rising from US$16.10 to US$2,398.40 per ounce.
“With tensions in the Middle East showing signs of easing, market attention turned to assessing the resilience of the US economy and the persistent control of inflation“Ricardo Evangelista, senior analyst at ActivTrades, said in a note to clients.
Gold: what data the market analyzes
“As prospects for a near-term rate cut by the Federal Reserve diminish and optimism grows about avoiding open conflict between Israel and Iran, Gold prices could be set for a correction as traders may start closing out long positions and capitalize the profits accumulated during the last month,” they said.
Marios Hadjikyriacos, senior investment analyst at XM, told clients that judging by the “measured” counterattacks, clearly neither Israel nor Iran were “interested in a real war.”
“The same goes for the United States, which has been trying to calm tensions behind the scenes. Therefore, investors are re-entering riskier trades and liquidating their hedges, hoping that the aftershocks will be contained“Hadjikyriacos said.
So far this year, Gold is up 14%, recently boosted by a series of attacks between Israel and Iran, although the weekend was quiet. Stock futures rose on Monday, with those for the S&P 500 ES00, +0.58% up 0.5% and those for the Nasdaq Composite NQ00, +0.68% up 0.6%.
Source: Ambito
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