Gold Falls to Two-Week Low as Brent Oil Surges Past $90
Escalating US military strikes on Iran pushed Brent crude above $90 a barrel, but gold still slumped to a two-week low as weak Asian physical demand and a wary tech sector weighed on prices.
Spot gold fell 0.4% to $4,000.55 per ounce early Monday, extending a 2.5% weekly decline after touching a two-week low on Friday. U.S. gold futures for August delivery eased 0.3% to $4,005.90. The drop in the traditional safe-haven asset contrasts with a sharp escalation in geopolitical tensions that typically drive bullion higher.
Brent crude surged 3% to trade above $90 a barrel as military conflict in the Middle East intensified. The U.S. military said it conducted a ninth consecutive night of attacks against Iran. This followed a U.S. announcement that at least two American military personnel were killed in Jordan, while U.S. allies in the region reported additional Iranian attacks on Sunday.
Broader financial markets reflected a risk-off mood. Asian share markets were hesitant as investors braced for a packed week of major technology earnings. These results will serve as a critical test for investor faith in the sustained momentum of artificial intelligence-related stocks. Adding to the cautious tone were growing voices within the market calling for further U.S. Federal Reserve rate hikes.
The weakness in gold prices is occurring despite sustained bullishness from futures speculators. Commodity Futures Trading Commission data showed that COMEX gold speculators raised their net long positions by 4,294 contracts to 119,147 in the week ended July 14. However, this paper demand is being offset by a lack of physical buying in key consumer markets.
In India, gold discounts widened to a one-month high last week. Jewellery demand remained weak, with buyers staying on the sidelines in anticipation of further price declines. Similarly, retail demand in China stayed muted, keeping premiums in the region largely steady.
Meanwhile, the rest of the precious metals complex traded higher. Spot silver gained 0.9% to $56.42 per ounce. Platinum rose 0.1% to $1,592.97, and palladium climbed 0.3% to $1,251.74.
