-Thadeu Dos Santos, Regional Director at Infinox
“Gold prices edged higher, finding short-term support from a modest pullback in the US dollar. However, the metal remains highly sensitive to evolving geopolitical dynamics in the Middle East, where hopes of de-escalation could shift sentiment.
However, elevated oil prices could continue to fuel inflationary pressures, which in turn could push major central banks toward a less accommodative policy stance. This dynamic supports higher global treasury yields, increasing the opportunity cost of holding non-yielding assets such as gold and capping its upside potential. Additionally, the strength of recent US economic data, particularly in the labor market, further underpins expectations of a cautious monetary policy. This reduces the likelihood of imminent rate cuts and adds another layer of constraint on gold’s medium-term trajectory. In parallel, gold continues to draw support from ongoing central bank diversification strategies and persistent geopolitical risks globally. While Turkey’s central bank has reduced its gold holdings, broader official sector demand remains intact, with other central banks continuing to accumulate reserves, providing a longer-term floor for prices.”
