(RTTNews) – Extending yesterday’s surge, gold prices have edged higher on Thursday gaining back the ground it lost earlier due to profit-taking after U.S. President Donald Trump announced drastic economic measures against Iran which renewed crude oil supply concerns. In the absence of a fresh military campaign, the lowered safe-haven demand for the U.S. dollar reduced expectations for a near-term rate hike in the U.S.
Front Month Comex Gold for September month delivery has inched higher by $19.30 (or 0.43%) to $4,514.40 per troy ounce.
Front Month Comex Silver for September month delivery has sharply surged by $2.420 (or 3.68%) to $68.245 per troy ounce.
On Tuesday, stepping up his offensive against Iran, through Truth Social, Trump announced that no negotiations were ongoing with Iran and neither were they scheduled.
Trump added that the Strait of Hormuz is open, operative, and free of all mines laid by Iran during the start of the conflict. He also observed that the U.S. naval blockade on Iranian ports continues with full force and effect.
Prior to this message, Trump posted a picture of the region that depicted the Strait of Hormuz highlighted as a “NEW U.S. Territory”.
Iran continued to claim that the Hormuz territory is still under its control.
With both the U.S. and Iran sticking to their stance, market participants wound back their expectations for an early end to the U.S.-Iran conflict and the possibility of an immediate reopening of the Strait of Hormuz.
Today, Trump claimed Iran has failed to utilize the opportunities given to strike a deal with the U.S. Therefore, he announced a crushing economic operation against Iran at an unprecedented scale.
Trump also warned that any country that allows its financial institutions, businesses, airports, or other entities to come in support of Iran would face similar consequences.
Calling it an economic D-day on Iran, Trump wanted U.S. allies to stand with the U.S. to defeat Iran and prevent it from making or possessing any nuclear weapon.
Iran’s Foreign Minister Abbas Araghchi dismissed Trump’s threats as a diversionary tactic from America’s debt crisis and stated that Trump’s moves will bring more defeat to the U.S.
Yesterday, data from the U.S. Treasury showed that the U.S. national debt crossed the $40 trillion mark for the first time.
Crude oil prices moved higher for the fifth straight day today, pushing inflationary concerns higher.
On the monetary front, yesterday the U.S. Treasury announced that it will at least double the size of its liquidity-support buyback operations for longer-dated Treasury securities.
Beginning September 9, the Treasury will increase the maximum purchase from $2 billion to nearly $4 billion per operation.
With inflation expectations increasing and real yields declining, precious metals surged yesterday.
According to U.S. Department of Labor data, the number of first-time claims for unemployment benefits fell by 6,000 to 206,000 in the second week of August, below market expectations of 210,000.
Meanwhile, continuing jobless claims increased to 1,799,000 for the week ending August 8 from 1,781,000 of the previous week.
The U.S. dollar index was last seen trading at 98.91, up by 0.08 (or 0.08%) today.
With the safe-haven demand reduced after Trump avoided any new military campaign for the time being, and adopting economic pressures, the U.S. dollar traded nearly flat.
Currently, investors are betting on only a 34.60% chance of a quarter-point interest rate-hike at its upcoming meeting of the U.S. Federal Reserve on September 15-16 while the odds on rates being held at the current level stand at 65.40%, according to the CME Group’s FedWatch Tool.
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