Key Highlights
- Precious metal prices climbed 0.4% to approximately $4,509 per ounce on Monday following last week’s drop to $4,000/oz
- OCBC market strategists characterize the recovery as primarily technical, identifying critical resistance points at $4,624, $4,670, and $4,850 per ounce
- Yemen-based Houthi forces launched strikes against Israel during the weekend, intensifying concerns about regional conflict expansion
- Iranian forces targeted aluminum production infrastructure in Bahrain and UAE, driving aluminum values up 5.4%
- Rising energy costs combined with dollar strength continue pressuring gold, which has declined 13% during the current month
Precious metal valuations moved upward during Asian trading hours Monday, with spot prices advancing 0.4% to reach $4,509.51 per ounce. Futures contracts similarly appreciated 0.4%, settling at $4,537.40 per ounce.
This uptick follows a volatile period during which spot valuations plummeted to $4,000 per ounce before staging a recovery toward $4,500 by Friday’s close.
ANZ market strategists noted that value-seeking investors entered the market following what they described as one of the most significant precious metal selloffs in recent memory. Liquidations from gold-backed exchange-traded funds had driven prices downward by more than 15% throughout the month.
The yellow metal remains underwater by over 13% for the monthly period. Strengthening in the U.S. dollar combined with escalating petroleum prices have capped recovery momentum.
Brent crude rocketed past the $115 per barrel threshold following Yemen’s Houthi forces joining the hostilities and taking credit for a missile assault on Israel during weekend hours.
OCBC market analysts characterized gold’s bounce from recent lows as predominantly technical in nature. They observed that the relative strength index had climbed out of oversold conditions, though cautioned this alone doesn’t guarantee a durable rally.
The analysts pinpointed crucial resistance thresholds for spot gold at $4,624, $4,670, and $4,850 per ounce. Inability to maintain levels above these benchmarks could result in continued weakness, they cautioned.
Escalating energy costs present additional headwinds. OCBC warned these increases threaten to sustain elevated inflation, potentially driving Treasury yields upward and creating a more adverse climate for precious metals.
Iranian Conflict and Escalation Dangers
The U.S.-Israel military campaign against Iran shifted into a new stage over the weekend. The Houthi militia, which receives backing from Iran and operates from Yemen, launched attacks against Israel, amplifying anxieties about broader hostilities and possible interruptions to Red Sea maritime traffic.
Tehran announced its readiness for a ground incursion by American forces, following intelligence suggesting Washington was deploying thousands of military personnel to the area.
President Trump informed journalists that diplomatic talks with Iran were progressing favorably and that an agreement might be imminent. He provided no specific timeframe while simultaneously cautioning about additional strikes against Tehran.
Trump had pushed back a deadline for operations targeting Iran’s energy sector to early April.
Aluminum Sector Disrupted by Iranian Military Operations
Iranian forces launched strikes against aluminum manufacturing infrastructure in Bahrain and the United Arab Emirates over the weekend. Three-month aluminum futures traded on the London Metal Exchange surged 5.4% to $3,461 per metric ton and have climbed more than 10% for the month.
Aluminium Bahrain acknowledged its operations were hit and indicated it was evaluating the extent of damage.
Emirates Global Aluminium reported its Al Taweelah facility in Abu Dhabi suffered significant damage from Iranian drone and missile bombardment.
ANZ market analysts cautioned that approximately 4 to 5 million tons of aluminum exports from the region face ongoing threats, with no alternative sources available to compensate for potential supply gaps.
Silver declined 0.9% to $69.09 per ounce, while platinum advanced 1.8% to $1,898.73 per ounce during Monday’s session.
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