Gold Strengthens Amidst Rising Geopolitical Risks
Gold saw significant gains amid rising geopolitical risks, but did not correlate strongly with Treasury yields or the US dollar. Tighter monetary policy by the Federal Reserve remains a concern that may limit further increases in gold prices.
On Tuesday (21), gold futures witnessed a significant rise, closing at US$ 4,076.4 per troy ounce on the New York Mercantile Exchange (Nymex) with an increase of 1.51%. This development comes amid increasing geopolitical risks, with crude oil prices hovering above $90. However, gold did not correlate strongly with Treasury yields and the US dollar, showing a more isolated performance compared to other financial assets. Barbara Lambrecht, commodities analyst from Commerzbank, noted that gold has found support above the psychological level of US$ 4,000 per troy ounce. Nevertheless, concerns over tighter monetary policy by the Federal Reserve (Fed) may limit stronger gains in the precious metal, with Fed authorities adopting a more 'hawkish' stance in recent weeks, which could curtail future price advances.
Source: Valor Econômico