S&P 500 — US Large Cap Index
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IPC Index — Mexico Market- Gold price tests region below $5,000 in Monday’s early Asian session.
- US officials said that the Iran war is expected to end within the next few weeks.
- Rising oil prices could lead to prolonged inflation and potentially higher interest rates, weighing on the Gold price.
Gold price (XAU/USD) slumps to around $4,967.70 during the early Asian session on Monday. The precious metal faces selling pressure as uncertainty surrounding the monetary policy announcement by major central banks this week is dominating the intense geopolitical conflict in the Middle East. Traders will closely monitor the developments surrounding the United States (US)-Israel war with Iran, a scenario that typically boost the demand for safe-haven assets.
The US President Donald Trump administration said that they expect the conflict in Iran to come to an end within weeks or “sooner.” Meanwhile, Israel’s military noted that it plans for its campaign to continue for at least three more weeks.
Over the weekend, US forces targeted every military site on Kharg Island, a critical Iranian oil export hub. Iran has threatened to retaliate against any US-linked oil facilities in the region.
Although war is generally expected to boost the Gold price, the current growing tensions have led to an increase in oil costs. This, in turn, has fueled concerns about inflation and led markets to believe that the Federal Reserve (Fed) will delay cutting interest rates, which is negative for non-yielding assets, such as Gold.
Apart from the Fed, the Reserve Bank of Australia (RBA), the Bank of Japan (BoJ), the European Central Bank (ECB), and the Bank of England (BoE) are scheduled to announce their monetary policy decisions this week. All central banks are expected to leave interest rates unchanged at their current levels, except the RBA, which is expected to raise them again.
