WASHINGTON (dpa-AFX) - After three sessions of losses, gold prices have ticked higher on Friday as the current U.S.-Iran standoff fuels concerns of possible rate hikes by U.S. Federal Reserve as well as stagflation in the economy if oil prices continue to surge.
Front Month Comex Gold for December delivery has edged up by $3.70 (or 0.10%) to $3,889.00 per troy ounce.
Meanwhile, front Month Comex Silver for December delivery has tumbled by $0.945 (or 1.89%) to $49.120 per troy ounce.
Since yesterday, investors have wound up their expectations on both a U.S.-Iran deal as well as the early reopening of the Strait of Hormuz.
After Iranian leaders expressed strong remarks against the U.S., U.S. President Donald Trump messaged through Truth Social that the U.S. is no longer interested in any deal with Iran.
Following the Republican party's defeat in the November 3 midterm elections, Trump did not announce his plans on Iran until Saturday.
On Sunday, Trump stated that a renewal of attacks on Iran would be highly unlikely.
Later on Wednesday, remarking that he was seeing positive momentum in negotiations, Trump decided to pause the strikes on Iran at the request of Arabian leaders even though he continued to enforce the economic and naval blockade. Speaking in a similar vein, U.S. Secretary of State Marco Rubio asserted that no combat actions were needed against Iran.
Sounding contrastingly different, the Secretary of Iran's Supreme National Security Council Mohsen Rezaei denied any negotiations with the U.S.
Reviving optimism, the Wall Street Journal reported that U.S. Vice President JD Vance will meet the Iranian hardliners face to face for negotiations.
Yesterday, trouncing all speculation, Trump messaged through Truth Social that the days when the U.S. waited for an agreement with Iran are over and he currently does not want any deal.
Following an U.S. airstrike on a communications tower in Sirik yesterday, Iran's Islamic Revolutionary Guards Corps announced destroying a U.S. early-warning radar in Bahrain.
Contradicting this claim, U.S. Central Command announced shooting down two Iranian drones launched towards Bahrain.
Though rising oil prices could push inflation higher, experts are of the view that a prolonged delay in U.S.-Iran truce could lead to demand destruction in the economy, which could lead to stagflation.
On the economic front, data released by the U.S. Bureau of Labor Statistics revealed that on a month-on-month basis in October, producer prices (considered a proxy for wholesale prices) increased 0.3%, easing sharply from an upwardly revised 1.4% increase in September and coming in below market expectations of 0.4%, largely reflecting moderating energy price pressures.
On an annual basis, the PPI increased by 6.50% from the previous year in October, the most since November of 2022.
The core producer prices (which exclude food and energy goods) increased by 0.3%, in line with market forecasts. On a yearly basis, the prices held at 5% for a second month in October, matching expectations.
Though the monthly data showed a slowdown, the annual numbers are higher than last year.
Analysts assessed the input against the recent Consumer Price Index readings and the core CPI, both of which came above market forecasts.
In the U.S. stock markets, optimism on technology shares showed a gradual comeback.
Over the past few days, the news about the exit of Nvidia CEO Jensen Huang kept pressure on the company's stock. Following his resignation yesterday, the shares tumbled by more than 4%.
In an interview with CNBC, acknowledging that inflation is beginning to spread and proving far more persistent than analysts expected, Chicago Fed President Austan Goolsbee stated that the U.S. Federal Reserve has got work to do on inflation.
Today, the U.S. dollar index was last seen trading at 103.34, up by 0.17 (or 0.16%) today.
According to the CME Group's FedWatch Tool, investors are currently betting on a 89.4% 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 raised by 50 basis points stand at 10.6%.
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