(Bloomberg) — Gold edged higher as traders weighed a report on a diplomatic push for a ceasefire in the Iran war.
Bullion reversed earlier losses to trade near $4,700 an ounce. The US, Iran and regional mediators are discussing terms for a potential 45-day ceasefire that could lead to an end of fighting, Axios reported, citing sources with knowledge of the talks.
Over the weekend, US President Donald Trump threatened to bring “Hell” to Iran if it didn’t open the Strait of Hormuz, an ultimatum that Tehran rejected. Trump later said he plans to hold a news conference at 1 p.m. on Monday and also posted about a Tuesday 8 p.m. Eastern Time deadline, without offering details.
Gold has fallen more than 10% since the conflict started, as spiking energy prices stoke inflation fears and dim the prospects for interest rate cuts that typically benefit the non-yielding precious metal. Bullion’s haven appeal has also been weakened by the need for investors to liquidate positions to cover other losses.
“People are taking chips off the table to protect their assets,” said Robert Gottlieb, a market commentator and former precious metals trader at JPMorgan Chase & Co.
A spike in US gasoline prices will be on full display when key US inflation data is released this week. Economists are forecasting a 1% increase in the consumer price index for March, which would be the sharpest one-month advance since 2022. The war has added more than $1 per gallon to prices at the pump.
At the same time, signs of a stabilizing US job market are cooling the urgency for monetary easing to boost the economy. An increase in nonfarm payrolls in March to the most since the end of 2024 will likely reinforce the Federal Reserve’s focus on inflation risks that are being compounded by higher energy prices.
Spot gold traded 0.4% higher at $4,695.41 an ounce by 11:04 a.m. in London. Silver gained 0.2% to $73.18. Platinum and palladium also rose. The Bloomberg Dollar Spot Index, a gauge of the US currency, edged 0.2% lower.
–With assistance from Carolynn Look.
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