WASHINGTON (dpa-AFX) - Gold prices have moved higher on Monday after U.S. President Donald Trump struck a reconciliatory tone on Iran, which led to a slump in crude oil prices and lowered inflation concerns.
Qatar's push for diplomatic ways to end U.S.-Iran hostilities has fueled expectations of peace talks gaining space over military aggression in resolving the conflict.
Front Month Comex Gold for December delivery has climbed by $35.30 (or 0.87%) to $4,110.20 per troy ounce.
Front Month Comex Silver for December delivery has also surged by $0.698 (or 1.34%) to $52.640 per troy ounce, completely offsetting Friday's losses.
In an interview with CNN with Ross Douthat, Trump stated that the possibility for renewed attacks on Iran are highly unlikely if the ongoing efforts for achieving a diplomatic solution to the crisis show progress.
Repeating most of what he had stated on several occasions, Trump commented that with nearly 301% inflation, Iran is a failing nation. Trump stressed that U.S. had hit Iran financially and militarily.
The war, which began in February, is now in its ninth month. Iran closed the Strait of Hormuz immediately after the war erupted and the strait has remained closed since.
Even though diplomatic efforts did not yield any breakthrough, the exchange of attacks were paused by both sides.
However, over the past few weeks, fear of renewed attacks caught the markets following several media reports stating that the U.S. military was on the verge of starting a short but intense attack on Iran after November mid-term elections. The election resulted in a defeat for the Republican party.
While Trump admitted that the war on Iran was partly responsible for the setback, U.S. Vice President Donald JD Vance expressed that the conflict and the resultant oil-linked inflation pushed Republican voters to flip their votes in favor of Democrats. Hence, analysts were betting on Trump softening his stance on Iran.
Though Trump did not reveal his plans on Iran until Saturday, following his interview yesterday, concerns of a fresh war-threat diminished and crude oil prices nosedived.
Today, the WTI crude oil for December was last seen trading down by $3.14 (or 3.46%), at $87.69 per barrel.
Adding weight to analysts' predictions that Trump could possibly implement the economic sanctions on Iran and refrain from military maneuvers, through Truth Social, Trump messaged that Task Force Iron Gate is in full force and effect on Iran, which, along with the naval blockade, is preventing any movement inside or outside of the nation.
Striking a different tone, U.S. Secretary of State Marco Rubio observed that talks are ongoing but not close to any breakthrough since Iran's demands are not acceptable.
With support from Saudi Arabia, Egypt, and Turkey, Qatar has been frantically exchanging messages, proposals and counter-proposals between the U.S. and Iran to avert a full-blown war in the gulf.
The Prime Minister of Qatar Sheikh Mohammed bin Abdulrahman Al Thani is in the U.S. to meet Trump and Vance to pursue diplomatic efforts.
A report by Israel Hayom stated that Iran had sent a new proposal through Qatar to the U.S, according to which Iran is ready to open the Strait of Hormuz immediately if the U.S. agrees to release nearly $8 billion worth of Iranian funds frozen in foreign countries and agrees to lift the economic blockade on Iran.
Middle East tensions still persist though.
US Central Command stated that its forces disabled a bulk carrier, Huda, in the Gulf of Oman on November 7 after it attempted to breach the U.S. naval blockade on Iran.
Iran's Islamic Revolutionary Guards Corps reported that three oil tankers caught fire attempting to transit the strait.
With inflation concerns lowered, expectations of a high-interest regime in the U.S. declined, and the U.S. dollar started to slide, offering positive support for the yellow metal.
Today, the U.S. dollar index was last seen trading at 101.82, down by 0.47 (or 0.46%) today.
According to the CME Group's FedWatch Tool, currently investors are betting on a 82.20% chance of a 25-basis-point interest rate-hike at the upcoming meeting of the U.S. Federal Reserve on December 8-9 while the odds on rates being held at the current level stand at 17.80%.
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