Gold Plunges More Than 3% as Middle East War Risks Mount

Gold fell sharply and was close to wiping out this year’s gains, as the war in the Middle East entered its fourth week and the US and Iran traded threats of new attacks.Author of the article:You can save this article by registering for free here. Or sign-in if you have an account.(Bloomberg) — Gold fell sharply and was close to wiping out this year’s gains, as the war in the Middle East entered its fourth week and the US and Iran traded threats of new attacks.Subscribe now to read the latest news in your city and across Canada.Subscribe now to read the latest news in your city and across Canada.Create an account or sign in to continue with your reading experience.Create an account or sign in to continue with your reading experience.Bullion plunged as much as 3.8% to near $4,320.30 an ounce — less than a dollar above where it ended last year. Since the conflict began, surging oil prices have raised inflationary risks and reduced prospects for near-term interest-rate cuts by the US Federal Reserve and other central banks. This is a headwind for non-yielding gold, which has fallen for eight consecutive sessions and just posted its biggest weekly drop since 1983.Gold’s choppy opening mirrored the broader market, with crude retreating after an initial small gain and equity markets also volatile. In the three weeks since the war began on Feb. 28, bullion’s decline has been driven partly by forced selling as investors seek to cover losses elsewhere in their portfolios. The metal ended last year at $4,319.37 an ounce.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Over the weekend, US President Donald Trump gave Iran a two-day deadline to reopen the Strait of Hormuz or have its power plants bombed. Iran countered that it would close the strategic waterway “completely” and target energy, information technology and desalination infrastructure if its power facilities come under attack. Trump’s ultimatum came at 7:44 p.m. New York time on Saturday.“Gold is primed for a bounce in the short term” due to technical reasons, said Kyle Rodda, an analyst at Capital.com Inc. Much will depend “on whether Trump follows through with his threats to hit Iranian power plants,” he said.Bullion’s 14-day relative-strength index — a gauge of momentum — extended a fall below 30, a level that some traders see as indicating it’s oversold. Hedge funds and other large speculators increased their net-long position for gold to the highest in seven weeks as of March 17, weekly US government data published Friday showed.Spot gold plunged 3.3% to $4,343.40 an ounce at 9:00 a.m. in Singapore. Silver slipped 3.4% to $65.61. Platinum and palladium also fell.

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