Gold pared losses as the dollar pushed lower after US President Donald Trump signaled the US war on Iran could be ending soon.
“I think the war is very complete, pretty much” and the military operation is “very far” ahead of its initial four- to five-week time frame, Trump told CBS News in a Monday phone interview. “They have no navy, no communications, they’ve got no air force,” he said of Iran.
A gauge of the US dollar fell as much as 0.2%, helping bullion recoup some of its earlier losses. Oil fell below $90 a barrel.
Bullion has been under pressure since the Iran conflict started due to concerns of rising inflation fueled by surging energy prices. Traders have been betting the Federal Reserve and other central banks may hold rates steady or even hike to contain inflation. Higher rates are negative for gold. The haven asset is also a source of liquidity during a deepening rout in global equities fueled by the geopolitical uncertainty in the Middle East.
The war in the Middle East has now entered its 10th day. Over the weekend, Tehran picked a new supreme leader and kept up attacks in the Persian Gulf region, while Israel struck fuel depots in the Iranian capital and threatened the Islamic Republic’s power grid. Attacks on energy infrastructure and a halt to shipping through the Strait of Hormuz, which normally handles a fifth of the world’s oil, have driven up prices of crude and natural gas.
While trading has been choppy and upward momentum has stalled, gold has still gained around 19% this year. Trump’s upheaval of global trade and geopolitics, as well as threats to the Fed’s independence, has largely supported assets perceived as havens. Elevated central-bank buying has also helped growth, and the People’s Bank of China bought more gold in February, extending its purchasing streak to 16 months.
Spot gold fell 0.7% to $5,135.14 an ounce as of 4:25 p.m. in New York. Silver gained 2.2% to $ 86.42. Platinum and palladium both advanced. The Bloomberg Dollar Spot Index slid 0.1%, after adding 1.3% last week.
With assistance from Robin Paxton and Jack Ryan.
This article was generated from an automated news agency feed without modifications to text.
