Most Asian currencies weakened on Friday amidst escalating geopolitical tensions, with the US Dollar (USD) and the Japanese Yen (JPY) garnering safe-haven demand. Reports of retaliatory strikes by Israel against Iran fueled risk aversion, pushing investors towards traditional safe-haven assets.
Gold prices for XAU/USD continued their downward slide on Tuesday, echoing the trend from the day prior. Currently hovering near $2,305.90 per ounce, this marks a notable retreat from April's highs around $2,430 per ounce, signaling a notable relaxation in market tensions.
During the Asian session on Friday, the price of gold (XAU/USD) showed a modest increase, reaching $2,335 an ounce, although without sustained buying momentum and lingering below the previous high. Investors are redirecting their attention past the disappointing US GDP figures, as the growing consensus anticipates a delay in interest rate cuts by the Federal Reserve due to persistent inflationary pressures, consequently bolstering demand for the US Dollar (USD). This, coupled with a generally optimistic sentiment in equity markets, acts as a significant headwind for the safe-haven appeal of precious metals.
The Australian Dollar (AUD) has experienced significant fluctuations, primarily influenced by the Reserve Bank of Australia's (RBA) recent decision to maintain its interest rate at 4.35%. Despite the anticipation of a hawkish shift following unexpectedly high inflation figures, the RBA has maintained a cautious approach, citing the need for vigilance against inflation risks. Governor Michele Bullock underscored the necessity of maintaining current rates to guide inflation back to the target range of 2-3% by the latter half of 2025.