(RTTNews) – Extending the gains from the previous two sessions, gold prices have edged higher on Tuesday as investors analyzed reports indicating a possible U.S.-Iran deal while the recent standoff over demands for reparation costs and the consequent delay in the reopening of the Strait of Hormuz kept expectations of high interest rates in the U.S. alive, weighing on the yellow metal.
Front Month Comex Gold for September month delivery has inched higher by $23.20 (or 0.53%) to $4,394.60 per troy ounce.
Front Month Comex Silver for September month delivery has slid by $0.327 (or 0.50%) to $64.945 per troy ounce.
Investors awaited an early deal between the U.S. and Iran to reopen the Strait of Hormuz in the U.S.-Iran war.
Despite Iran ruling out any talks with the U.S. and insisting that it is in discussions only with Oman to finalize a deal to manage the shipping traffic across the Strait of Hormuz, leaders from the U.S. confirmed active negotiations.
On Saturday, U.S. Vice President JD Vance expressed confidence about striking a deal with Iran.
Iran’s Supreme National Security Council announced that a deal with Oman was in the final stages but added that the reopening of the Strait of Hormuz would depend on the U.S. complying with several of Iran’s demands.
Among the multiple preconditions listed by Iran, Iran wanted compensation for the extensive damages it suffered due to the recent war with the U.S.-Israeli forces.
Displeased by this, through Truth Social, U.S. President Donald Trump placed a counter-demand to Iran seeking compensation for all the deaths caused during various conflicts involving Iran over the past decades in several countries as well as during the recent civil uprising within Iran.
Trump also held Iran responsible for the damages and killings in Lebanon, Syria, Yemen, and Gaza and demanded Iran to compensate.
With events taking a new turn, analysts are concerned that the distance between both the nations are widening.
Meanwhile, Bloomberg News reported Pakistan’s Defense Minister Khawaja Asif as stating that signals from the last two to three days indicate that the U.S. and Iran are close to reaching “some sort of an arrangement”.
Al Jazeera reported citing Qatar’s Foreign Ministry spokesman Majed al-Ansari as stating that the negotiations between Iran and Oman on the future management of shipping traffic across the Strait of Hormuz has reached an advanced stage.
Meanwhile, the Interior Minister of Pakistan Syed Mohsin Raza Naqvi is in Iran for talks as a part of Pakistan’s mediatory efforts.
These reports renewed optimism among investors and contained U.S. dollar value from moving up, which favored the yellow metal.
The U.S. dollar index was last seen trading at 99.86, up by 0.09 (or 0.09%) today.
Economists are awaiting the U.S. Consumer Price Index report to be released on Wednesday and Producer Price Index on Thursday to comprehend the U.S. Federal Reserve’s direction on monetary tightening.
Meanwhile, gold prices were supported following reports of brisk buying by global central banks.
Yesterday, Fox News cited a World Gold Council survey to report that a record 45% of global central banks are planning to increase their gold inventories.
Officially, the People’s Bank of China purchased 640,000 troy ounces of gold in July, closely following the 480,000 troy ounce increase to the nation’s gold holdings in June. For 21 straight months, the nation has added gold to its reserves.
On the economic front, the U.S. Automatic Data Processing data revealed that the weekly employment change decreased to 825,000 on July 25 from 15,000 of the previous week.
On August 7, the U.S. of Labor Statistics revealed that the economy unexpectedly lost 23,000 jobs in July, compared to forecasts of an 80,000 increase.
Following this, analysts’ expectations for a Fed rate hike in September dropped by around 10%. Strategists are of the view that the Fed may lean to holding the rates steady despite inflation hovering above the 2% range.
Currently, investors are betting on a 49.90% chance of a quarter-point interest rate-hike in the 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 50.10%, according to the CME Group’s FedWatch Tool.
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