WASHINGTON (dpa-AFX) - Gold prices have inched higher on Wednesday as Middle East war concerns continue to linger amid conflicting reports about a possible U.S.-Iran peace deal while market participants assessed indications the U.S. Federal Reserve might hold interest rates steady at its upcoming October 27-28 meeting.
Front Month Comex Gold for December delivery has moved higher by $7.10 (or 0.17%) to $4,149.70 per troy ounce.
Front Month Comex Silver for December delivery has moved lower by $0.325 (or 0.56%) to $57.675 per troy ounce.
Yesterday, citing sources, the London-based pan-Arab news outlet Al-Araby Al-Jadeed reported that Pakistan and Qatar came up with a proposal aimed to bring a resolution to the ongoing U.S.-Iran conflict.
The report added that both nations have given their preliminary approval to the plan and that while the U.S. agreed to release Iranian funds frozen in Qatar, Iran consented to a visit to Iranian nuclear sites by experts from the International Atomic Energy Agency.
A breakthrough to halt the conflict was reportedly expected to be announced this week following which crude oil prices reversed an initial surge yesterday.
However, citing a diplomat involved in the negotiations, other news sources mentioned that even though U.S.-Iran talks were underway, report indicating that a deal was close was wrong.
Iran's Foreign Minister Abbas Araghchi stated that though Iran remains committed to seek a dignified peaceful resolution to the conflict, it is fully prepared to defend the nation. He also stressed that the Strait of Hormuz would continue to be closed until the U.S. agrees to Iran's conditions.
Iran's President Masoud Pezeshkian stated that the U.S. cannot expect negotiations with Iran while imposing an economic blockade and threatening with military forces.
U.S. Secretary of State Marco Rubio commented that making a deal with the Iranian regime is tough and added that the U.S. will maintain the extraordinary economic pressure on Iran.
Amid these conflicting reports surrounding U.S.-Iran negotiations, investors adopted a cautious stance.
Elsewhere in the Middle East, the conflict between the Houthis and Saudi Arabia continued to heighten, prompting the Gulf Cooperation Council nations to hold a meeting to discuss measures to deal with attacks on Saudi Arabia by the Houthi rebels.
A de-escalation in the Middle East lowers the risk premium tied to the Strait of Hormuz oil and energy supply.
Traders are of the view that the U.S. administration would focus on Iran after the November mid-term elections.
The U.S. Federal Reserve is set to announce its interest rates on October 28.
Yesterday, citing a poll conducted between October 16-20, Reuters reported that 94 of the 100 economists surveyed were of the view that the Fed would maintain rates in the current 3.75% to 4.00% range in October.
However, all the respondents anticipated a quarter-point increase in December due to persistent inflation and increasing energy prices.
Market attention is now shifting to the upcoming U.S. jobless claims data on Thursday and the Flash Purchasing Managers Index on Friday to estimate the Fed's move.
In a significant note released by the Bank of Russia, Russia sold 200,000 troy ounces of gold in September, equivalent to 6.20 tonnes, lowering the country's gold holdings to 72.80 million troy ounces.
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