Gold Prices Surge 1.6% Amid Reports of Trump-Brokered Iran Ceasefire

Gold Prices Surge Amid Iran Conflict

Gold prices rose sharply on Thursday, climbing as much as 1.6% to near $4,780 an ounce, after US President Donald Trump announced a two-week extension to finalize talks on ending the war in Iran. This move came less than two hours before Trump's self-imposed deadline to wipe out Iran's "whole civilization."

The bullion's price increase extended a 1.2% gain in the previous session, with spot gold rising 1.4% to $4,770.50 an ounce as of 6:46 a.m. in Singapore. Silver gained 2.6% to $74.90, while platinum and palladium also advanced. The US dollar fell, supporting gold prices.

The prolonged conflict in the Middle East has had a significant impact on the global economy, driving a spike in energy prices and raising inflationary risks. This has led to increased uncertainty, 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.

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Gold has fallen almost 10% since the conflict began at the end of February, with the metal's traditional haven appeal weakened by the need for some investors to liquidate positions to cover losses elsewhere. However, the current developments suggest that gold may be poised for a recovery as investors seek safe-haven assets amid the ongoing uncertainty.

The Bloomberg Dollar Spot Index, a gauge of the US currency, fell 0.3% on Thursday, further supporting gold prices.