Gold Advances for Third Day on Hopes Iran War Is Near End
Gold climbed for a third session as the dollar and bond yields pushed lower on signs the U.S. and Iran are open to ending the war in the Middle East.
The U.S. currency and Treasury yields retreated further on reports that both countries are signaling an opening toward a resolution. That helped boost bullion as much as 3.4%, reaching the highest level in more than a week.
Earlier Tuesday, the Wall Street Journal reported that U.S. President Donald Trump would be willing to exit the conflict even with the Strait of Hormuz largely closed. Trump also called on other nations to take control of the Strait of Hormuz as Iran continued missile fire across the Persian Gulf, expressing frustration that the monthlong war remains unresolved.
“Markets are trading very much on headlines, when in reality there appears to have been very little change,” said David Wilson, director of commodity strategy at BNP Paribas SA. “What this does suggest is, however, that if there is a peace deal in the offing, gold will rally sharply. Conversely, if there is some form of land invasion by U.S. forces, we can expect gold to do the opposite and trend lower.”
Separately, U.S. data showed consumer confidence unexpectedly rose in March on slightly more upbeat views of business and labor market conditions. Job openings fell and hiring slowed in February, pointing to cooler labor demand before the war triggered additional uncertainty.
Despite a strong rebound in the past few days, bullion is still headed for its worst month since 2008 as the Middle East conflict has upended global markets and triggered concerns about a simultaneous spike in inflation and a slowdown in economic growth.
Traders had been betting that global central banks might need to raise interest rates to contain elevated price pressures, but reversed course on Monday after Jerome Powell said longer-term inflation expectations remain anchored. Higher rates are a headwind for bullion as it doesn’t pay interest. Meanwhile, gold also suffered forced selling tied to the equities rout during the first few weeks of the war, which has entered its second month.
Spot gold rose 3.6% to $4,672.65 an ounce as of 3:03 p.m. in New York. Silver climbed 7.2% to $75.15 an ounce. Platinum and palladium also advanced. The Bloomberg Dollar Spot Index fell 0.5%.
Source : Newsmaker.id
