(RTTNews) – Gold prices rose sharply to hover near a one-week high on Monday after U.S. President Donald Trump announced a tentative peace deal with Iran, helping ease investor concerns about inflationary pressures and lessening the need for interest-rate hikes.
Signing ceremony is set for Friday in Switzerland following weeks of mixed messaging from both Washington and Tehran on the trajectory of the conflict.
Spot gold soared 2.9 percent to $4,341.64 an ounce, while U.S. gold futures were up 2.8 percent at $4,357.82.
The U.S. dollar hit a 10-day low, global bond yields fell and oil prices plunged more than 5 percent to hit three-month lows after Trump said the tentative deal included opening the vital Strait of Hormuz, without giving further details. With no official terms yet released, exact details of the deal are not clear.
In economic news, traders also await cues from a slew of central bank meetings slated for the week.
Central banks in the U.S., U.K., Japan, Australia, Switzerland, Sweden, Norway and Russia will be meeting this week to announce their monetary policy decisions.
The Federal Reserve is certain to stay on hold at Chair Kevin Warsh’s debut meeting, with traders likely to scrutinize the FOMC policy statement, economic projections and the press conference for fresh insights to whether policymakers signal rate cuts despite prevailing inflationary pressures.
The Bank of England is also expected to keep rates steady, but the Bank of Japan is poised to raise interest rates to a 31-year high.
On the data front, U.S. New York Empire State manufacturing index for June, industrial and manufacturing productions for May and U.S. NAHB housing market index for June are slated for release in the New York session.
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