Gold Surges on Optimism Over US-Iran Peace Deal Despite Fed Rate Signals
Gold prices rose today, buoyed by the signing of an interim peace agreement between the United States and Iran, even as the Federal Reserve signaled a potential interest rate hike later this year.
The precious metal climbed as much as 1.7% to $4,328 per ounce, recovering losses from the previous session. U.S. and Iranian officials signed the peace deal electronically on Wednesday evening, although it remains unclear whether the Strait of Hormuz has reopened.
Oil prices fell as the accord is expected to ease the global energy shock that has driven inflation and rate-hike expectations. Nonetheless, uncertainty lingers regarding how quickly fuel prices will decline and when traffic through the strait can return to pre-war levels.
“Lower oil continues to help marginally,” said Christopher Wong, a strategist at Oversea-Chinese Banking Corp. “However, the Fed’s decision complicates the near-term outlook for gold, even as the medium-term case remains constructive.”
The Federal Reserve held interest rates steady on Wednesday to maintain price stability and removed references to further rate adjustments. Markets now fully price in a potential tightening by October. Higher rates remain a headwind for non-yielding assets such as gold.
“For gold, the expectation of a rate hike was already factored in before the latest Fed decision,” said Ryan Mckay, senior commodity strategist at TD Securities. “Overall sentiment remains bearish for the yellow metal, meaning it would take a significant shift in Fed outlook to change the market’s stance on precious metals.”
Spot gold rose 1.6% to $4,322.83 per ounce as of 9:21 a.m. Singapore time. Silver advanced 2.5% to $69.61 after falling 3% in the previous session. Platinum and palladium also gained, while the Bloomberg Dollar Spot Index eased 0.2% following a 0.7% gain in the prior session.
Source : Newsmaker.id
