Gold held a gain after US President Donald Trump said the Strait of Hormuz could reopen on Friday, likely easing an energy and inflation shock that has roiled global markets.
Bullion was near $4,315 an ounce, having climbed 2.2% in the previous session after the US and Iran announced an interim deal to end the war and lift their maritime blockades in the region. Adding a note of caution, however, US allies were less optimistic about how quickly flows of energy and other commodities via the strategic waterway could resume.Gold is down about 18% since the US and Israel launched strikes on Iran in late February. It’s moved largely in an inverse relationship to crude during the war, as higher energy prices have fueled inflation and prompted central banks to keep rates higher for longer, dimming the appeal of non-yielding precious metals.
“Both gold and silver remain underpriced” in comparison with their reactions during past Middle East conflicts, said Nicky Shiels, head of research and metals strategy at trader and refiner MKS PAMP SA. If the peace deal holds, traders are expected to ease off selling and revert to treating gold as a haven and an alternative to US assets, including the dollar, she said.
Precious metals traders are awaiting a series of central bank decisions this week, with the Federal Reserve set to meet under new Chair Kevin Warsh for the first time. Market expectations are geared toward a rate hike later this year.
Spot gold ticked up 0.1% $4,316.51 an ounce as of 8:00 a.m. in Singapore. Silver edged down 0.1% to $69.87, after rising 2.9% in the earlier session. Platinum and palladium and the Bloomberg Dollar Spot Index, a gauge of the US currency, were marginally lower.
By – https://www.mining.com/web/gold-price-jumps-after-us-and-iran-reach-deal-to-reopen-hormuz-strait/