Gold prices showed little change in European trading on Thursday after modest gains in the prior session, as investors monitored renewed tensions in the Middle East that could threaten the fragile ceasefire between the United States and Iran.
At 05:30 ET (09:30 GMT), spot gold edged up 0.2% to $4,730.24 per ounce, while June U.S. gold futures slipped 0.4% to $4,756.09 per ounce.
The precious metal finished Wednesday 0.3% higher after earlier rising as much as 3%. The move came after a temporary ceasefire between Washington and Tehran helped ease immediate fears of a supply shock, though it failed to fully reassure financial markets.
Continued Middle East conflict raises questions over ceasefire
The truce, reportedly mediated by Pakistan, is intended to pause hostilities for two weeks and allow the reopening of the strategically vital Strait of Hormuz.
Nevertheless, investor sentiment remained guarded as Israeli airstrikes in Lebanon continued, raising doubts about the durability of the ceasefire. Iran also warned that negotiations with the United States would be “unreasonable” under the current circumstances.
Tehran has halted the movement of oil tankers through the Strait of Hormuz, while U.S. President Donald Trump said American military forces would remain stationed around Iran until a “real agreement” is secured.
Oil prices posted a modest recovery on Thursday after falling sharply in the previous session following the ceasefire announcement.
“Conflicting geopolitical signals are driving choppy price action in gold, with safe haven demand offset by shifts in risk sentiment and dollar moves,” ING analysts said in a note.
“Looking ahead, gold is likely to remain headline driven in the near term, with further clarity on the durability and scope of the ceasefire key for determining whether prices can regain upside momentum,” they added.
Markets look to U.S. inflation data for Fed guidance
Gold, widely regarded as a safe-haven asset, has recently come under pressure as the rebound in oil prices fueled concerns about global inflation.
Investors are now awaiting the release of the U.S. consumer price index (CPI) for March on Friday, which could provide additional insight into inflation trends and the Federal Reserve’s future interest rate strategy.
Markets are preparing for a noticeable increase, as higher energy costs linked to the recent oil shock continue to filter through the broader economy.
Meanwhile, the U.S. dollar steadied after falling 0.7% in the previous session, limiting further gains in gold.
Among other precious metals, spot silver was unchanged at $74.10 per ounce, while platinum slipped 0.5% to $2,021.59 per ounce.
In base metals trading, benchmark copper futures on the London Metal Exchange declined 0.6% to $12,625.33 per ton, while U.S. copper futures fell 1.3% to $5.70 per pound.
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