Gold jumps as US-Iran ceasefire lifts markets
Gold prices climbed after US President Donald Trump and Iran agreed to a two-week ceasefire to advance talks on ending the conflict that has disrupted global markets.
Bullion rose by as much as 3.2%, surpassing $4,850 per ounce, building on a 1.2% gain in the previous session, News.Az reports, citing Bloomberg.
Trump said in a social media post that he had agreed to halt bombing operations less than two hours before a self-imposed deadline to destroy Iran’s “whole civilization,” adding that reopening the Strait of Hormuz was a key condition for the pause.
Iran indicated that safe passage through the strait would be “possible” for the two-week period.
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Oil prices dropped below $100 per barrel, while the US dollar also weakened, providing support for gold, which is priced in the American currency. At the same time, equities rallied, with MSCI’s Asia-Pacific index reaching a three-week high. Since the start of the Middle East conflict, gold has largely moved in tandem with stocks, as its traditional safe-haven appeal has been reduced by investors covering losses in other parts of their portfolios.
Gold has declined by around 9% since the war began at the end of February. However, a moderate rebound in recent days has been driven by optimism surrounding a ceasefire, along with expectations that slower global economic growth could offset expectations of stable or higher interest rates.
On Tuesday, prior to the ceasefire announcement, three Federal Reserve officials voiced concerns about inflation and slowing economic growth. Vice Chair Philip Jefferson said interest rates are broadly at levels that neither stimulate nor restrict the economy, while New York Fed President John Williams noted that his outlook for underlying US inflation pressures remains largely unchanged.
Spot gold increased by 2% to $4,800.47 per ounce as of 12:49 p.m. in Singapore. Silver rose 4.9% to $76.56, while platinum and palladium also posted gains. Meanwhile, the Bloomberg Dollar Spot Index, which tracks the US currency, declined by 0.8%.
By Nijat Babayev
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