(RTTNews) – Gold prices have advanced on Monday, extending the gains from Friday’s session as a pause on mutual attacks by both the U.S. and Iran eased escalation tensions in the ongoing gulf crisis. Expectations of a tighter monetary policy in the U.S. diminished amid a freefall in crude oil prices.
Front Month Comex Gold for August month delivery has edged higher by $7.00 (or 0.17%) to $4,077.80 per troy ounce.
Front Month Comex Silver for August month delivery has also advanced by $0.340 (or 0.58%) to $59.055 per troy ounce.
The U.S.-Iran conflict that began on February 28 restarted less than a month of signing of the June 17 Memorandum of Understanding between the U.S. and Iran.
For nearly the past two weeks, the exchange of strikes went on vigorously, with the U.S. attacking Iran for 13 consecutive nights.
Behind-the-door mediatory efforts by Pakistan with support from Qatar did not result in any breakthrough.
Today, Iran’s Foreign Ministry spokesperson Esmaeil Baghaei stressed that Iran is concerned only about its national interests and not what the U.S. expects.
Baghaei stated that Iran is only involved in talks with Oman regarding the management of shipping in the Strait of Hormuz and dismissed reports of negotiations with the U.S. However, he acknowledged that the U.S. and Iran are exchanging messages.
Accusing the U.S. of first violating the MoU prompting Iran to retaliate, Baghaei was noncommittal about the future of the MoU.
Last Friday, U.S. President Donald Trump threatened that he was considering a massive attack on Iran on a never-before-seen scale, which heightened concerns of an all-out war.
However, hours later, citing two sources Axios reported that the top military commander in the Middle East, Admiral Brad Cooper suggested to Trump to halt the bombing campaign around the Strait of Hormuz region as its effectiveness has saturated.
Separately, the New York Times reported that the Chairman of the Joint Chiefs of Staff, General Dan Caine cautioned U.S. Defense Secretary Pete Hegseth and Trump in private that the U.S. was running out of air defense interceptors which may weaken the ability of U.S forces in the Middle East to protect themselves or their allies.
Following this, Trump ordered the military to hold the planned big-scale attacks.
Yesterday, on NBC’s “Meet the Press”, U.S. ambassador to the U.N., Mike Waltz stated that Trump wants to give talks with Iran some space.
Currently, the ground situation in the gulf is calm after both sides paused their mutual attacks. Iran stated that it will maintain the ceasefire as long as the U.S. remains on pause.
Consequently, crude oil prices declined and lowered the oil-linked inflationary pressure on the U.S. dollar.
Addressing reporters today, Trump remarked that the U.S. has plenty of time for any decision on Iran and acknowledged that the U.S. is engaged in talks with Iran. Trump hinted that there is a good chance something positive could happen.
With the U.S. Federal Reserve’s two-day meeting scheduled to begin tomorrow, Trump stressed again that the U.S. should have the world’s lowest interest rates.
Economists are of the view that the current truce has eased pressure on the U.S. Federal Reserve, offering near-term support for gold.
A majority of investors are pricing in a hold on interest rates by the Fed. However, focus has shifted on the comments by Fed Chair Kevin Warsh after the monetary policy announcement.
The U.S. dollar index was last seen trading at 101.50, up by 0.04 (or 0.04%) today.
Currently, investors are betting on a 37.90% chance of a quarter-basis-point interest rate-hike in the upcoming two-day meeting of the U.S. Federal Reserve, while the odds on rates being held at the current level stand at 62.10%, according to the CME Group’s FedWatch Tool.
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