Gold was steady after President Donald Trump expressed renewed optimism that the US and Iran could agree a permanent ceasefire to end the war that’s upended markets and heightened inflation fears.
Bullion was near $4,795 an ounce in early trading, having ended the previous session little changed. Trump said Iran had agreed to terms it has long resisted, including the reopening of the Strait of Hormuz, although some European and Gulf Arab leaders predicted that a US-Iran peace deal could take about six months to be brokered.
Trump also announced that Israel and Lebanon had agreed to a 10-day ceasefire, a move that was later confirmed by Israeli Prime Minister Benjamin Netanyahu. But control over Hormuz, the key waterway that links the Persian Gulf to global markets, remains contentious, with a US naval blockade still in place and Iran pressing ahead with plans to charge ships for transit even after the war is over.
Oil fell on Friday, a day after US stocks pushed to another record high. A recent retreat in energy prices has relieved some of the inflationary pressure that has weighed on bullion since the war began nearly seven weeks ago. Concern about rising consumer prices has led traders to bet that central banks will hold interest rates steady for longer or even hike them — a headwind for non-yielding bullion.
Federal Reserve Bank of New York President John Williams said on Thursday that high uncertainty should prevent policymakers from providing any strong guidance on the future path of rates, though his outlook still includes cuts in the longer term.
Spot gold edged 0.1% higher to $4,796.05 an ounce at 6:16 a.m. in Singapore. Silver rose 0.5% to $78.83 an ounce. The Bloomberg Dollar Spot Index, a gauge of the US currency, ended the previous session 0.1% higher.
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