At the start of the Asian trading session on the morning of May 6,
gold prices rose more strongly, nearing the $4,600 per ounce level, after President Trump announced progress in the peace talks between the United States and Iran.
Gold prices globally rose again on Tuesday, May 5, helped by a pullback in oil prices after the United States said the ceasefire with Iran remained in place. However, gains were capped by a stronger dollar and net selling by the SPDR Gold Trust, the world’s largest gold-backed ETF.
At the close, spot gold in New York traded at $4,556.1/oz, up $32.6/oz from the previous session, equivalent to a 0.7% gain, according to Kitco data.
Silver traded at $72.71/oz, down $0.15, or 0.2%.
On the COMEX futures market, gold futures rose 0.8% to settle around $1,568.5/oz.
Prior to this rebound, gold had fallen to its lowest in more than a month during Monday’s session. If the previous session’s pressure came from a rally in oil, in this session gold was helped as oil declined.
The developments of the Middle East crisis and oil prices remain the key drivers of gold. The “formula” here is that as tensions escalate, oil prices rise, fueling inflation expectations and prompting expectations that central banks keep rates higher for longer, which exerts downside pressure on gold as a non-yielding asset. Conversely, when tensions ease, the rebound in gold becomes likely.
On Tuesday, the United States declared that the fragile ceasefire with Iran remained intact, though the United Arab Emirates said it had been attacked by Iran with missiles and drones. Earlier on Monday, U.S. and Iranian forces had exchanged fire near the Hormuz Strait as Washington sought to open this vital maritime artery.
News that the ceasefire remained in place helped crude oil move lower on Tuesday, though declines were modest compared with recent gains.
At the close, Brent crude traded in London fell about 4% to $109.87/bbl. WTI crude in New York fell nearly 4% to $102.27/bbl.
In addition to the oil decline, gold’s price was supported by bargain-hunting after spot gold hit its lowest since March 31 during Monday’s session. “We are seeing some investors bottom-fishing after the recent sell-off in gold, and lower oil prices are also supporting gold. The market remains mainly driven by war news, but could shift focus a bit more toward fundamental economic data. Gold bulls need a catalyst from macro data to regain the edge,” said Jim Wyckoff, senior analyst at American Gold Exchange, to Reuters.
However, the rebound on Tuesday was tempered by a stronger dollar and by continued selling by the SPDR Gold Trust, the world’s largest gold ETF. The Dollar Index rose 0.11% to 98.49.
SPDR Gold Trust was net seller of about 1.7 tonnes of gold for the session, reducing holdings to 1,034.1 tonnes.
At the start of the Asian session on May 6, gold prices rebounded more strongly, approaching the $4,600/oz level after President Trump said progress had been made in the peace process with Iran.
In a post on Truth Social, Trump said the U.S. has paused the nautical convoy operation through the Hormuz Strait known as the “Freedom Project,” one day after the operation began. He said the decision was based on “significant progress toward a comprehensive and final agreement” with Iran.
At 6:30 a.m. Vietnam time, spot gold was up nearly 0.6% from the U.S. close, trading above $4,585/oz. Silver was up more than 1.3%, trading above $73.9/oz.
The above price translates to approximately VND 145.6 million per tael when converted at Vietcombank’s USD selling rate, up VND 1.9 million per tael from the previous morning.
At the same time, Vietcombank’s USD quote stood at 26,096 VND (buy) and 26,366 VND (sell), down 11 VND on the buy side and down 1 VND on the sell side from the previous morning.
