Market News

(Bloomberg) -- Gold edged lower, retracing some of the previous day’s gain, as the market monitored developments around the US-Iran ceasefire.

The precious metal fluctuated between gains and loses before falling to trade just above $4,500 an ounce. Treasury yields hovered near multiyear highs as still-elevated energy prices continued to fan inflation concerns. Higher borrowing costs reduce the appeal of non-yielding bullion. Meanwhile, a gauge of the dollar rose 0.2%, making gold more expensive for many buyers.

President Donald Trump said Monday he had authorized a new wave of attacks against Iran this week, but was holding off after the leaders of Qatar, Saudi Arabia and the United Arab Emirates wanted more time to pursue diplomacy.

Gold has traded in a narrow range since falling sharply in the early days of the war as inflationary fears were moderated by the possibility of monetary easing on growth concerns. Bullion is down almost 14% since the conflict erupted.

The fluidity with regards to the situation in the Middle East along with oil prices and bond yields may still weigh on gold in the short term, said Vasu Menon, a strategist at Oversea-Chinese Banking Corp. “We continue to see gold as a useful hedge against global uncertainties given significant political and economic changes happening globally, which look set to gather pace in the coming years,” he added.

Spot gold was 0.5% lower at $4,544 an ounce as of 9:13 a.m. in London. Silver was down 2.2% at $76.05. Platinum and palladium also declined.

--With assistance from Jack Ryan.