Gold Price Rises Against Backdrop of Oil Price Decline

Gold prices rose on Tuesday and partially recovered losses from the previous session, which is linked to a decline in oil prices. The cheapening of energy resources has reduced fears of rapid inflation growth and, accordingly, expectations of strict monetary policy from central banks.

According to stock market data, spot gold increased by 1.0% and reached $4,528.32 per ounce, while gold futures rose by 1.2% and climbed to $4,558.62.

In the previous session, gold prices fell sharply after information spread that Iran had halted mediation communication with the United States. This development intensifies concerns about escalation of conflict in the Middle East, which in turn increases risks associated with a prolonged blockade of the Strait of Hormuz.

The Strait of Hormuz is the transit route for approximately one-fifth of global oil and its potential closure creates significant pressure on energy markets, amplifying expectations of rising inflation and interest rate increases. In such circumstances, as a rule, non-yielding assets, including gold, become less attractive.

At the same time, Brent oil futures declined following a sharp rise in the previous session, which indicates a certain stabilization in the market.

According to analysts at Deutsche Bank, the dynamics of gold and oil prices in the recent period differ from each other because inflationary pressure is no longer caused solely by energy resources, and the growth of real interest rates also plays a significant role.