Gold rises as push for US-Iran diplomacy eases inflation risk The swap market is still betting that the US Federal Reserve will hold rates steady this year - Gold has fallen about 9% since the start of the war, with a liquidity squeeze in the early weeks of fighting leading investors to offload holdings and cover losses elsewhere. PHOTO: REUTERS DeeperDive is a beta AI feature. Refer to full articles for the facts. [SINGAPORE] Gold edged higher as a renewed push for a diplomatic resolution to the Iran war eased inflation concerns, despite continued tensions around the Strait of Hormuz. Bullion advanced beyond US$4,810 an ounce, having lost 1.1 per cent in the previous session. The US and Iran are considering a two-week ceasefire extension to allow more time to negotiate an end to the conflict that’s disrupted global markets, according to a source familiar with the matter. But the movement of vessels through Hormuz remains choked, with the US blockading Iranian ships and Teheran keeping the critical waterway closed to most other traffic. The two sides have an “in principle agreement” to pursue further diplomacy after an inconclusive initial round of talks in Pakistan at the weekend, the Associated Press reported. US President Donald Trump played down the prospect of renewed fighting on Tuesday, telling Fox Business that the near seven-week war is “close to over”. Oil was steady on Thursday, while US stocks ended the previous day at record highs and a gauge of the US dollar edged lower. Softer crude prices in recent days have eased concerns about inflation which had made central banks more likely to hold interest rates steady for longer, or even hike them. The swap market is still betting that the US Federal Reserve will hold rates steady this year, a view supported by comments from Fed Bank of St Louis President Alberto Musalem and Fed Bank of Cleveland President Beth Hammack, who said that she foresees rates “on hold for a good while.” Higher borrowing costs are a headwind for non-yielding bullion. “Given the fragile ceasefire and switch to focus on real yields, gold is not yet out of the woods, and liquidity needs could continue to pressure prices further,” Suki Cooper, global head of commodities research at Standard Chartered Plc, wrote in a note. With the competing risks of inflation and slower growth, “the policy response will be key,” she said, as gold “transitions away from moving in-step with risk assets.” Navigate Asia in a new global order Get the insights delivered to your inbox. Gold has fallen about 9 per cent since the start of the war, with a liquidity squeeze in the early weeks of fighting leading investors to offload holdings and cover losses elsewhere. In a sign that buyers are coming back to the market, bullion-backed exchange-traded funds have added around 25 tonnes so far this month, after cutting around 94 tonnes in March, according to a Bloomberg calculation. Spot gold rose 0.5 per cent to US$4,812.95 an ounce as at 7.15 am in Singapore. Silver climbed 0.6 per cent to US$79.39. Platinum and palladium were little changed, while the Bloomberg Dollar Spot Index was flat after ending the previous session down 0.1 per cent. BLOOMBERG Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free. Share with us your feedback on BT's products and services
Gold rises as push for US-Iran diplomacy eases inflation risk The swap market is still betting that the US Federal Reserve will hold rates steady this year - Gold has fallen about 9% since the start of the war, with a liquidity squeeze in the early weeks of fighting leading inves…
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International mediators have proposed a 10-day ceasefire between the United States and Iran, according to a senior Iranian official cited in reports. The measure is described as intended to reduce hostilities and allow renewed talks on a prior interim agreement.
Both sides are assessing next steps in the current regional security situation.
Reports indicate that a US-Iran ceasefire has broken down amid renewed fighting, with the potential impact of mediation efforts by Pakistan, Qatar, and Oman remaining unclear. Earlier diplomatic steps included a June memorandum of understanding between the parties for further negotiations and talks hosted in Geneva in February.
The summary also references Europe’s historical role in diplomacy, including the 1814-15 Congress of Vienna.
Donald Trump stated in a Fox News interview that his representatives had spoken with Iranian officials an hour earlier and that those officials wanted to make a deal to end the conflict, though he noted they had broken prior agreements and expressed uncertainty about whether one would be reached.
He added that people do not want to die and that Iran would need to proceed carefully to avoid further losses. The remarks come amid an ongoing US-Iran conflict that has involved casualties and shipping disruptions in the Strait of Hormuz, with some social media users criticizing the repetition of similar statements.
Why the Iran-US ceasefire is falling apart Iran and the US have resumed fighting because they don’t see each other as ‘reliable negotiating partners’, says analyst Ali Vaez. Neither Iran nor the United States seems able to deliver a “knockout blow at an acceptable price” to the other side, and both know “they have no choice other than engaging in diplomacy”, but they’re not ready to make uncomfortable concessions, argues Ali Vaez, director of the Iran Project at International Crisis Group.
Vaez tells host Steve Clemons that Tehran and Washington are trying to “enforce their own interpretation” of the ceasefire agreement they signed last month. President Trump has become “frustrated” with diplomacy because he’s not seeing “the kind of quick results that he likes to see”, Vaez says.