Gold boosted by Fed rate-cut bets, report on Trump war comments

Gold extended two days of gains on a report that US President Donald Trump is willing to end the Iran war without reopening the Strait of Hormuz, and comments from the Federal Reserve easing rate-hike bets.

Bullion jumped as much as 1.8% to trade near $4 585 an ounce, after adding 0.4% in the previous session. The advance came following a report from the Wall Street Journal that Trump told aides he’s willing to end the US military campaign against Iran even if the Strait of Hormuz remains largely closed, raising hopes for an end to the month-long conflict.

Meanwhile, Fed Chair Jerome Powell said long-term US inflation expectations appeared to be in check, despite the war-driven spike in oil prices that stoked inflationary pressures and rate-hike bets. The central bank’s policy was “in a good place for us to wait and see,” he said.

Dip-buyers have entered the gold market in recent days as investors take advantage of a decline in prices since the US and Israel launched strikes on Iran in late February.

Meanwhile, the White House threatened to escalate strikes on Iran, including on critical civilian infrastructure. Tehran approved legislation to impose fees on vessels transiting the Strait of Hormuz and is pushing the Houthi militant group in Yemen to prepare for a renewed campaign against shipping traffic in the Red Sea. Iran also attacked a Kuwaiti crude carrier that was in Dubai, Kuwait Petroleum Corp said on Tuesday.

The developments have raised concerns about the potential for a prolonged conflict that could see energy prices rise further and lead central banks to hike rates to tame inflation — a negative for non-yielding precious metals. That, along with a liquidity squeeze in broader financial markets, has set gold on track for a monthly decline of around 13%.

Spot gold rose 1.6% to $4 581. an ounce as of 9:23 a.m. Singapore time. Silver climbed 3.6% to $72.59 an ounce. Platinum and palladium also advanced. The Bloomberg Dollar Spot Index was little changed after ending the previous session up 0.3%.

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