The precious metals are seeing a relatively calm session this Friday. The Lunar Holiday continues while investors are assessing the US-Iran tension and its impact. Gold is holding the $5,000/oz level while silver is still trading below the key $80 per troy ounce levels.
Gold hovers around $5,000/oz level
Gold prices have managed to hold the key $5,000/oz levels as investors assessed US-Iran tension, while a drop in US jobless claims signalled labour-market stability ahead of inflation data later this week.
US President Donald Trump warned Iran that “bad things” would happen, and appeared to set a 10-day deadline before the US might take action. Geopolitical and economic flashpoints tend to work in gold’s favour, as the yellow metal is traditionally viewed as a safe store of value.
Jigar Trivedi, Senior Research Analyst at Indusind Securities, pointed out that, “Gold hovered around $5,000/oz, holding a two-day gain as traders weighed geopolitical risks alongside the Federal Reserve’s policy outlook. Tension between the US and Iran escalated after President Donald Trump set a 10–15-day deadline for nuclear deal talks, while the US deployed its largest military force in the Middle East since the 2003 Iraq invasion. Meanwhile, Federal Reserve Governor Stephen Miran tempered expectations for this year’s rate cuts, citing stronger-than-expected economic data.”
According to him, “investors now await PCE data due later today. January FOMC minutes also showed policymakers divided on rates, with some signalling possible hikes if inflation remains elevated. Elsewhere, physical demand in Asia remains seasonally muted amidthe Lunar New Year. MCX Gold April futures may stay elevated around Rs 1,56,000/kg, and on the flip side, Rs 1,53,500/kg is a support for intraday today.”
Silver below $80 per troy ounce levels
Silver is trading below the key $80 per troy ounce level. The minutes from the Federal Reserve’s January 27-28 meeting, released on Wednesday, showed policymakers were split on the monetary policy path ahead, with several open to hikes if inflation stays high, while others favoured cuts if price pressures ease.
US weekly jobless claims fell to 206,000 in the week to February 14, well below expectations for a reading of 225,000, reinforcing the strength signalled by last week’s robust monthly employment report.
Investors are now awaiting the release of the US Personal Consumption Expenditures Price Index.
Gaurav Garg, Research Analyst at Lemonn Markets Des,k pointed out that, “Near-term sentiment remains cautious amid a firmer US dollar and uncertainty around the policy outlook of the US Federal Reserve. However, safe-haven interest and ongoing central-bank buying continue to provide support on dips.”