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Gold holds gains as progress on Hormuz deal eases rate-hike bets
Iran and Oman reached agreement on a proposed temporary shipping route through the Strait of Hormuz, which helped gold offset recent weakness tied to higher for longer rates.
Gold held a sharp gain as signs of progress in reopening the Strait of Hormuz eased energy-driven pressure for the US Federal Reserve to raise interest rates further, according to LiveMint Markets. Bullion was trading around $4,260 per ounce after jumping 4.1% in the prior session, the biggest rise since Feb. 3.
The outlet said Iran announced it has reached agreement with Oman on a proposed shipping route through the strait, raising the prospect of some energy flows resuming. Iran’s deputy foreign minister, Kazem Gharibabadi, told domestic media the route would be temporary and active for two to four months, adding it does not amount to a full reopening, and US talks with Iran were ongoing as President Donald Trump said he would “see what happens.”
LiveMint Markets reported that the market had shifted to pricing in a single US rate increase by year end, down from two earlier in the month. The news helped support gold, which does not pay yield, although Fed Governor Lisa Cook repeated that the central bank is prepared to raise rates if inflation does not slow and warned it may not be able to wait to return to its 2% target.
In additional precious-metals news, the Bank of Korea said it is working with domestic producers, the Korea Exchange, and the Korea Securities Depository to establish a framework to purchase gold refined in South Korea, a first since 1967. As of 7:31 a.m. in Singapore, spot gold was up 0.4% to $4,262.66 per ounce, while silver rose 0.1% to $62.14 per ounce after a more than 4% jump in the previous session, the outlet said.
Latest closeGold $4,308.50 ▲5.2%|Silver $62.32 ▲3.8%