Gold gains on ceasefire hopes as tensions spike in Strait of Hormuz

Gold clawed back some losses after reports of diplomatic talks for a ceasefire in the Iran conflict, even as President Donald Trump escalated threats against Tehran, rattling global markets.

Bullion trimmed losses to trade near $4,630 an ounce after earlier sliding as much as 1.6%, News.Az reports, citing Bloomberg.

According to media reports, the US, Iran, and regional mediators are discussing terms for a potential 45-day ceasefire that could end fighting.

Over the weekend, Trump threatened to bring “Hell” to Iran if it did not reopen the Strait of Hormuz, an ultimatum Tehran rejected. The US president later announced a news conference for Monday at 1 p.m. and referenced a Tuesday 8 p.m. ET deadline without providing details. On March 26, Trump gave Iran a 10-day deadline to reopen Hormuz, which expires Monday evening. The strategic waterway has largely been closed since the conflict began in late February.

Meanwhile, signs of a stabilizing US job market reduced urgency for Federal Reserve rate cuts, adding pressure on gold. March nonfarm payrolls increased to the highest level since the end of 2024, reinforcing the Fed’s focus on inflation amid higher oil prices. As a non-yielding asset, gold typically benefits from low rates.

Gold has fallen about 12% since the conflict began, with spiking energy prices — including US gasoline — stoking inflation fears while investors liquidated positions to cover other losses. “People are taking chips off the table to protect their assets,” said Robert Gottlieb, market commentator and former JPMorgan Chase & Co. precious metals trader.

US gasoline price spikes will be highlighted in this week’s consumer price index data, with economists forecasting a 1% increase for March — the sharpest one-month rise since 2022. Crude oil prices climbed again on Monday, adding further pressure on markets.

Gold has also been unsettled by Trump’s mixed messaging, alternating between escalating attacks and signals the conflict may be ending. Bullion gained more than 4% last week, though Thursday’s drop ended a four-day winning streak.

“The 200-day moving average has held for now, and the late-month recovery suggests that the sell-off phase may be easing,” said Charu Chanana, chief investment strategist at Saxo Markets in Singapore. “The picture is not yet fully clear,” she added, noting that gold may remain weighed down by inflation and broader market declines.

Spot gold was down 0.5% at $4,655.64 an ounce at 3:10 p.m. Singapore time. Silver fell 1.1% to $72.19, platinum declined, while palladium rose. The Bloomberg Dollar Spot Index was flat after gaining 0.3% in the previous session.

News.Az 

By Nijat Babayev