Gold and silver are rising after Iran's declarations. Investors are changing their strategy
The exchange rate of gold and silver has recently been strongly dependent on interest rate forecasts. Precious metals do not provide interest, but they do, among others: American bonds. Therefore, rate increases encourage the transfer of capital from gold to bonds.
The market, anticipating interest rate increases in the US on Friday, had to quickly verify its forecasts after Sunday. On Friday, only 40 percent investors in futures contracts on the Chicago Stock Exchange were betting on the scenario that Fed rates would remain in place until December. For an increase of 0.25 percentage points. this year, 42.3 percent were betting. market, and for two increases of 0.25 percentage points each. — almost 15 percent A week ago, 69% of people believed in a scenario with at least one increase. market.
On Monday, it was 46 percent. contracts were set for no change in rates, a share predicting their increase by 0.25 percentage points decreased to 40.5 percent. After the opening of the American stock exchanges, the proportions may change even more towards those waiting for the Fed to refrain from raising the rate. This also reverses the attitude towards gold and silver.
Gold and silver are becoming more expensive in USD
Gold prices rise by 3% on Monday. up to $4,366 per ounce. This is the highest rate since June 9, when hopes for a peaceful turn of events in the Middle East were raised. Now, since declarations are also made by the Iranian side, and not only by the US, everything looks more likely.
Silver, which usually reacts more strongly than gold due to lower supply and liquidity, rose by 4.5% on Monday. up to $71 per ounce. Here, you have to look back to June 5 for higher ratings.
Peace talks
U.S. and Iranian officials said Sunday they had reached an agreement to end the war and reopen the Strait of Hormuz. This is still a preliminary agreement, but it has already led to a decline in oil prices. The fate of Tehran's nuclear program was left to further negotiations.
As Pakistani Prime Minister Shehbaz Sharif announced in a post on the X website, the agreement will be officially signed on Friday in Switzerland.
“Market participants are pricing in interest rate increases due to lower oil prices, which strengthens the metal,” UBS analyst Giovanni Staunovo commented to Reuters. “In the short term, I would expect some consolidation until the Fed gives us clear information at the end of the week,” he added.
The value of the US dollar fell to its lowest level in 10 days, making bullions priced in dollars more affordable for those earning money in other currencies. At the same time, oil prices fell to their lowest level in over three months. This may increase demand, among others. in India.
