Gold Prices Are Rising on Global Markets: The Main Reasons
18 June 15:11
Gold prices are rising gradually on Thursday, June 18, as support from the drop in oil prices—driven by the U.S.-Iran peace agreement—has outweighed pressure from the strengthening dollar, reports "Komersant Ukrainian", citing Reuters.
As of 12:59 p.m. Kyiv time, the spot price of gold rose 0.23% to $4,267.86 per troy ounce, after falling 1.7% the previous day. Oil prices fell after the U.S. and Iran signed a preliminary agreement that would resolve the Iranian conflict, reopen the Strait of Hormuz, and ease U.S. sanctions on Iranian oil, which improved the outlook for “black gold” supply.
“Gold is rebounding: bulls have decided to squeeze as much as possible out of the preliminary agreement between the U.S. and Iran, but the rally remains limited as the market expects at least one Fed rate hike by the end of 2026,” said Khan Tan of Bybit.
“The Fed’s hawkish rhetoric means that spot gold is more likely to slip back below $4,000 than to return to the $5,000 level in the second half of 2026,” Tan added.
The Fed kept the federal funds rate range at 3.50%–3.75% at its June meeting. At the same time, the Fed’s updated forecast indicates that policymakers expect to raise borrowing costs later this year due to concerns that inflation will remain above the 2% target.
The dollar index also affected the price of gold; the basket of six major currencies rose 0.52% to 100.61. A stronger dollar makes dollar-denominated metals more expensive for holders of other currencies.
“Investment demand (for gold) is weak, given outflows from exchange-traded funds and the reduction of long positions, but physical demand, particularly from China, as well as central bank purchases, are providing support to the market,” according to an ANZ note.
Palladium fell 1.23% to $1,296.17 per ounce, while silver rose 0.64% to $68.42 per ounce. The price of platinum fell 0.7% to $1,724.09.
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