(RTTNews) – Reversing two sessions of gains, gold prices have moved sharply lower on Tuesday as the U.S. decision to halt its strikes on Iran continued for the fourth night, lowering the safe-haven demand for the yellow metal.
Front Month Comex Gold for August month delivery has tumbled by $40.80 (or 1.00%) to $4,036.20 per troy ounce.
Front Month Comex Silver for August month delivery has also slumped by $1.237 (or 2.11%) to $57.280 per troy ounce.
The conflict between the U.S. and Iran, which renewed less than a month of signing a Memorandum of Understanding on June 17, is still unsettled.
Enraged by Iran’s strikes at ships transiting through the Strait of Hormuz, which it reopened following the MoU, U.S. forces launched multiple strikes at Iranian military targets.
Iran responded by hitting several U.S. bases in its neighboring nations. In addition, Iran closed the Strait of Hormuz, renewing crude oil supply-disruption concerns, which catapulted oil prices day after day.
Last week, U.S. President Donald Trump stated that he was planning a massive strike on Iran, which increased concerns of an expansive war in the gulf and shook global markets.
However, hours later, reportedly acting on the advice of senior military officials, Trump halted the strikes. The pause, which came after 13 consecutive nightly attacks on Iran, boosted market sentiment.
Yesterday, in an interview with Axios, Trump stated that he opted to momentarily halt the attacks to give negotiations between the two nations another chance. However, he did not rule out returning to military options if diplomacy failed.
Later, Trump announced that the U.S. has a lot of time for any decision with Iran, and admitted that the U.S. is engaged in negotiations with Iran. Trump expressed optimistically that there is a good chance something positive can happen.
Contradicting the U.S. stance, Iran’s Foreign Ministry denied any negotiations with the U.S. happening currently.
Despite these conflicting messages, the absence of any fresh attacks in the gulf for four consecutive nights has boosted market sentiments.
Reportedly, Oman, Qatar, and Pakistan are working to utilize this period to bring both nations to agree for a sustainable ceasefire.
With supply concerns lowering, crude oil prices continued to ease. As oil-linked inflation concerns subsided, the U.S. dollar felt downward pressure.
Today in the U.S., data released by the Automatic Data Processing revealed that the weekly employment change decreased to 15,000 in July from 16,500 of the previous week.
The two-day monetary policy meeting of the U.S. Federal Reserve commenced today.
Yesterday, Trump stressed that the U.S. should have the lowest interest rate in the world.
Currently, investors are betting on a 30.50% chance of a quarter-basis-point interest rate-hike, while the odds on rates being held at the current level stand at 69.50%, according to the CME Group’s FedWatch Tool.
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