Signals of Iran Negotiations Lift Gold
Gold prices strengthened after two sessions of declines, supported by easing inflation concerns and renewed optimism that the US-Iran war could end through negotiations. Bullion rose as much as 1.2% to US$4,797/oz, paring the previous two days' losses.
The gains came despite the US initiating a naval blockade of the Strait of Hormuz. President Donald Trump said Iranian officials approached his government with the desire to "reach a deal," while Iranian President Masoud Pezeshkian stated Tehran was ready to resume peace talks within the framework of international law. In the market, oil weakened below US$100/barrel, equities strengthened, and the dollar fell for a seventh straight day—its longest losing streak in two years—giving dollar-denominated gold some support.
Falling energy prices eased some of the inflationary pressures that have weighed on gold since the conflict began more than six weeks ago. However, the risk of supply shocks and economic stress remains, particularly as the US blockade of shipping to and from Iranian ports and coastal areas escalates tensions. The US currency market still rates the Fed's December interest rate cut below 20%, reflecting caution regarding inflation.
At 9:43 a.m. New York time, spot gold rose 1% to US$4,790.88/oz. Silver jumped 3.5% to US$78.23, while the Bloomberg Dollar Index fell 0.4%. Despite a modest recovery in recent weeks, gold is still down around 10% since the conflict broke out in late February, having previously been pressured by selling to cover losses in other assets when liquidity tightened. (Arl)*
Source: Newsmaker.id
