US-Iran clashes. How will they affect metal prices?
Gold and silver prices began the week with declines, despite escalating tensions in the Middle East.
As reported by the United States Central Command (CENTCOM), U.S. forces "struck Iranian air defense systems, coastal radar stations, missile and drone assets, and small boats."
The statement indicates that one of the key issues remains the throughput of the Strait of Hormuz.
"Iran does not control it", the message said.
CENTCOM emphasized that Washington is "ready and prepared to ensure that freedom of navigation remains available for commercial vessels."
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Łukasz Wydra, Cashify Gold analyst, told FXMAG whether geopolitical tensions in the Middle East still have a significant impact on gold and silver prices, as they did at the start of the conflict.
The market has largely absorbed the geopolitical risk associated with the Middle East, so the impact of further reports on gold and silver is currently significantly weaker than at the beginning of the conflict.
Investors view ongoing tensions as a constant market environment factor, not a new impulse for a rapid flight to safe assets. A stronger reaction could only appear in the event of a clear escalation of the conflict or events that would realistically increase risk to the global economy and trade.
The expert also pointed out other events that may have the greatest impact on metal prices in the near future.
At the beginning of the third quarter, investors will focus mainly on U.S. economic data and Federal Reserve communications. Key will be inflation readings, labor market data, and expectations regarding further interest rate decisions.
"For gold, key support remains central bank purchases, while for silver additional support will come from global industry conditions and demand from the new technology and energy transition sectors", he added.
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Gold and silver price before a rise? Expert answers
The spot gold price on Monday, July 13 is at 4060 USD per ounce (-1.46%).
As Łukasz Wydra noted, if the scenario of gradual fading of geopolitical influence continues while expectations of a softer Fed policy remain, "gold should stay in a long‑term uptrend."
Additional support comes from central bank purchases and investment demand. In such an environment, the potential for price growth towards around 4500 USD per ounce remains realistic.
Chart. Spot gold price (XAU/USD)
Source: Trading Economics.
Silver price reaches 58,4 USD per ounce (-2.29%).
"For silver, the key will be the pace of rebuilding investment demand after a sharp correction and the supply side situation," the expert said.
The current valuation around 60 dollars per ounce already accounts for some concerns about reduced demand from photovoltaics, so a return of investment capital could become a catalyst for another growth wave towards 70-80 USD per ounce—he summarized.
Chart. Spot silver price (XAG/USD)
Source: Trading Economics.
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