Trump says Iran war "close to over" amid hopes for more negotiations
Investing.com - Gold prices fell on Wednesday, as the U.S. dollar firmed slightly, but bullion remains higher over the past one-week period as investors eye hopes for a permanent ceasefire in the Iran war.
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Spot gold was down by 0.4% at $4,821.45 an ounce by 09:44 ET (13:44 GMT), easing from recent one-month highs. Gold futures declined by 0.2% to $4,843.80 an ounce.
Yet spot prices for the yellow metal are higher by roughly 1.6% over the last week, in a potential sign of some re-emerging risk appetite following indications that the U.S. and Iran may be nearing an off-ramp to a conflict which began in late February.
Throughout March, gold was battered by a war-induced spike in oil prices, which fueled fears of a surge in inflationary pressures in countries around the world. This in turn drove expectations for potential interest rate hikes by global central banks, a prospect that does not bode well for a non-yielding metal like gold.
At the same time, investors largely flocked to the U.S. dollar as a bastion during the war, even though bullion is often viewed as a safe haven for investors during times of geopolitical strife. Underpinning the appeal of the greenback was the view that U.S., a net energy exporter, is broadly insulated from the stemming of oil supplies through the Strait of Hormuz, a vital waterway off of Iran’s southern coast through which roughly a fifth of the world’s crude passes.
The dollar index, which tracks the currency against a basket of its peers, was last higher by 0.1%. However, the gauge is now hovering only slightly above pre-war levels, as diplomatic efforts to resolve the war appear to be gaining some traction.
"Markets have grown more confident that the Middle East crisis is moving toward a resolution," analysts at ING including Francesco Pesole said in a note.
Trump says Iran war "close to over"
U.S. President Donald Trump has suggested that the U.S. war with Iran may be coming to a conclusion soon, even as the American military says an ongoing naval blockade has restricted shipping traffic in and out of Iran.
Speaking to Sky News in the U.K., Trump said it was "very possible" that a permanent ceasefire agreement with Iran could be reached prior to the visit of King Charles later this month. He added that Iran has been "beaten up pretty bad."
Earlier, Trump told Maria Bartiromo of Fox News that the conflict, which began with joint U.S. and Israeli strikes on Iran in late February, is "close to over."
The New York Post also reported that Trump expects temporary U.S.-Iran ceasefire talks to resume in the next two days, following a first round talks in Pakistan last weekend.
Trump has repeatedly claimed that the fighting is nearing an end and that the U.S. had achieved its objectives in Iran, including hampering Tehran’s nuclear ambitions and limiting its military capabilities. Iran has largely denied these claims.
The U.S. and Iran agreed to a tenuous two-week ceasefire until April 21. Hopes for de-escalation in the Middle East were furthered by Israel and Lebanon holding their first direct talks in decades this week in Washington. Israel has continued to carry out strikes against Iran-aligned Hezbollah targets in Lebanon, threatening to upend the halt to hostilities between the U.S. and Iran. Israel has disputed Iranian claims that Lebanon was included in the ceasefire deal.
Citing regional officials, the Associated Press reported mediators’ efforts to extend the ceasefire have made progress and both sides are now anticipated to return to the negotiating table. The news agency said mediators were working on a compromise to three of the main sticking points in the talks, such as Iran’s nuclear program, the closure of the Strait of Hormuz, and compensation for the war.
Still, tensions remain elevated in the Middle East. Along with fresh Israeli strikes on Lebanon, the U.S. military said it had fully enforced a naval blockade against Iran, likely in a bid to pressure Tehran into a peace deal with Washington.
(Ambar Warrick contributed reporting)
