Gold Down, Silver Up as Middle East Volatility Continues

 

Gold Down, Silver Up as Middle East Volatility Continues

(Bullion News Network) – Gold lost on Monday as fighting continued in the Middle East. The spot price of gold lost over $30 per troy ounce to start the week, losing ground as oil prices continued to climb over the weekend. Silver moved opposite to gold to begin the trading week. The spot price of silver gained nearly $2.70 per troy ounce to log its second consecutive daily gain on Monday. The price action favored silver, driving the gold-silver ratio nearly 3% lower. Platinum-group metals also outperformed gold. Platinum’s spot price jumped by more than $35 per troy ounce, and palladium added over $66/ozt to make a small dent in the platinum-palladium price gap. The price of crude oil spiked at over $110 per barrel on Monday before retreating to a little bit more than $85/barrel, a decrease from Friday’s $90.90/barrel close.

The war in Iran continued to escalate over the weekend, but remarks from the White House on Monday reversed oil’s movement and drove a positive reversal on Wall Street. U.S. President Donald Trump said in a telephone interview with Weijia Jiang that the US-Israeli war on Iran is “very complete, pretty much,” and that the United States is ahead of its timeline for ending the military operation.

Their missiles are down to a scatter. Their drones are being blown up all over the place, including their manufacturing of drones […] If you look, they have nothing left. There’s nothing left in a military sense.

Wall Street took a hit earlier on Monday as the price of crude oil skyrocketed to its highest level since the COVID-19 pandemic, peaking at nearly $120 per barrel. early Monday morning. Oil prices slid after the comments, and the Dow, S&P 500, and Nasdaq logged a major recovery to close in the green as Trump suggested an end to the conflict may be in sight. Gold prices changed little on the news, with the largest drop of the day occurring shortly after President Trump’s comments. Coinciding with the Middle East optimism was another surge for the United States dollar. Soaring oil prices sent the greenback higher amid a combination of safe haven trading and optimism as Trump’s comments drove speculation about the end of the war in Iran.

Also on Monday, Iranians took to the streets as Mojitaba Khamenei, son of the Iranian Supreme Leader killed in the first round of U.S. and Israeli strikes on Iran at the end of February, was chosen as the new Supreme Leader of Iran. Trump told reporters on Sunday that he believes he should help decide Iran’s new leader, remarking that any leader without his approval “is not going to last long.” Khamenei has never held a government position, meaning that his ideology is likely to become clearer in the next few weeks as he takes over command of the Iranian Revolutionary Guard and, presumably, the war effort against the United States and Israel.

Domestically, the major economic report this week will be Friday’s January Personal Consumption Expenditures index. The inflation report will be the last batch of consumer price data available to the FOMC before next week’s meeting. The Fed is largely expected to keep rates unchanged. CME FedWatch projects the probability of a rate cut at the March FOMC meeting to be 2.7%, down from 3.6% last week and 17.2% one month ago. This week’s inflation data report should be especially vital to the FOMC’s decision-making at its March meeting, especially following a worse-than-expected February employment report.

The spot price of gold retreated on Monday, while silver, platinum, and palladium increased. The mixed bag for safe haven assets came as the price of crude oil hit a years-long high, driving U.S. markets lower. Oil prices retreated and Wall Street staged a recovery later Monday afternoon as U.S. President Donald Trump suggested that the war with Iran could potentially end sooner than expected. Throughout the week, traders are likely to pay close attention to the war in Iran, as well as domestic inflation numbers, for cues on where safe haven demand may be heading.