Gold prices rise further as reports on Iran war negotiations provide a breather

Gold prices see a larger rise in gains; reports earlier said the U.S. was seeking a ceasefire to advance diplomacy, ending the nine-day streak of gold-price declines.

Gold prices once rose by 2.2%, moving back above $4,570 per ounce, extending the previous trading day’s 1.6% gain. U.S. President Donald Trump said Iran has put forward a “gift” that shows its sincerity in negotiations, and pointed out that it is related to energy shipments through the Strait of Hormuz. According to Axios, Washington and regional mediators are discussing the possibility of holding high-level peace talks as early as Thursday, but they are still waiting for Tehran’s response.

Oil prices fell, stocks rose, and an index measuring the dollar declined. Since the war broke out a little over three weeks ago, gold prices have largely moved in sync with stocks, with an inverse relationship to oil prices. This round of Middle East conflict, which has pushed energy prices higher, has further heightened inflation risks, prompting investors to bet on interest-rate hikes. This is unfavorable for non-yielding precious metals.

In recent weeks, the global selloff in stocks and bonds has also forced investors to unwind gold positions to raise cash, further intensifying the decline in gold prices.

The market remains tense. Iran tightly controls the Strait of Hormuz, while Israel continues to carry out airstrikes against Iran. The Trump administration has ordered the 82nd Airborne Division to deploy about 2,000 soldiers to the Middle East, and—along with an estimated additional roughly 5,000 soldiers expected to arrive in the region over the coming days—has further expanded the scale of troop reinforcement.

At 8:44 a.m. Singapore time, spot gold rose 2.1% to $4,569.78 per ounce. Silver rose 4.03% to $74.08 per ounce, after closing up 3% in the prior trading session. Platinum and palladium prices also rose. The Bloomberg Dollar Spot Index fell 0.3%.

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Byline: Wang Yongsheng