Gold steady with focus on US Hormuz plan and Iran peace talks

[SINGAPORE] Gold was steady, after a second weekly decline, as traders monitored progress towards a US-Iran deal and US President Donald Trump’s plan to start guiding some ships through the Strait of Hormuz.

Bullion was near US$4,620 an ounce. Trump said in a social media post on Sunday (May 3) that the US will begin guiding some ships that are not involved in the Iran conflict out through Hormuz starting on Monday and flagged “positive discussions” with Teheran.

That came after Trump on Saturday suggested the Islamic Republic’s latest peace proposal might not be enough to satisfy him. The conflict has kept energy prices elevated, dimming hopes for interest-rate cuts by central banks, a negative for non-yielding bullion. Gold has lost around 12 per cent since the war began at the end of February.

Looking ahead, traders will also focus on this week’s announcement of the US Treasury Department’s borrowing plans for the next three months, an array of Federal Reserve speakers and a loaded calendar of economic releases crowned by monthly employment data. The information should give clues on the trajectory of rates and the US fiscal deficit.

Many market watchers are still positive on the metal’s longer-term outlook, supported by buyers who have continued purchases despite recent slumps. The latest data from the producer-funded World Gold Council showed that central banks added gold holdings at the fastest pace in more than a year in the first quarter, while Tether Holdings extended a buying streak that’s made it the largest known holder of bullion in the world outside of banks and nation states.

Spot gold dipped 0.1 per cent to US$4,609.23 an ounce at 8.01 am in Singapore. Silver rose 0.3 per cent to US$75.57, while platinum and palladium advanced. The Bloomberg Dollar Spot Index, a gauge of the US currency, slipped 0.1 per cent. BLOOMBERG