Gold price climbs after Trump agrees to two-week ceasefire in Iran

Gold rose after US President Donald Trump said he had agreed to a two-week extension to finalize talks on ending the war in Iran.

Bullion climbed as much as 1.6% to near $4,780 an ounce, extending a 1.2% gain in the previous session. Trump said in a social media post that he had agreed to suspend bombing, less than two hours before his self-imposed deadline to wipe out Iran’s “whole civilization.” Oil slumped and the US dollar fell, supporting gold.

Now in its sixth week, the war in the Middle East has driven a spike in energy prices and raised inflationary risks, making it more likely that central banks will delay cutting interest rates or even hike them. Bond traders expect the Federal Reserve to keep borrowing costs steady through the rest of the year, which would be a headwind for non-yielding gold.

Gold has fallen almost 10% since the conflict began at the end of February, with the metal’s traditional haven appeal also weakened by the need for some investors to liquidate positions to cover losses elsewhere.

Spot gold rose 1.4% to $4,770.50 an ounce as of 6:46 a.m. in Singapore. Silver gained 2.6% to $74.90. Platinum and palladium also advanced. The Bloomberg Dollar Spot Index, a gauge of the US currency, fell 0.3%.

(By Yihui Xie)