(RTTNews) – Gold traded higher on Tuesday, extending its recovery from a six-month low as falling oil prices helped ease worries about inflation and the outlook for interest rates.
Spot gold jumped 0.8 percent to $4,342.37 an ounce, while U.S. gold futures were up 0.3 percent at $4,364.51.
Brent crude futures held near $82 a barrel after reports suggested that U.S. President Trump may release a preliminary deal to end the war with Iran before Friday.
The specific terms of the deal remain unclear, but Trump assured that the Strait of Hormuz will be “fully open” on Friday, the day the signing ceremony is scheduled for the framework agreement between Washington and Tehran to end their war in the Middle East.
If media reports are to be believed, the U.S.-Iran ceasefire is likely to be extended for 60 days, with the countries set to use that window to negotiate over Iran’s nuclear enrichment and the disposal of its highly enriched uranium.
The dollar held near 10-day lows as a two-day policy meeting of the U.S. Federal Reserve gets underway later today.
Despite concerns over sticky inflation, the U.S. central bank is widely expected to keep rates on hold on Wednesday under new Chair Kevin Warsh.
Warsh’s inaugural press conference, outlining his views on inflation, jobs, and U.S. economic outlook may offer additional clues on the future path of U.S. interest rates.
Elsewhere, the Bank of England looks set to keep the base rate at 3.75 percent when it meets on Thursday.
Earlier today, the Bank of Japan raised its interest rate to 1 percent, the highest since 1995, as it battles inflation caused by the Iran war.
In Australia, the country’s central bank kept its key interest rate unchanged for the first time this year after three consecutive increases.
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