Gold prices edged higher on Tuesday, as investors piled back into the beaten-down safe haven asset amid a euphoric relief rally in equities.
However, spot gold was on track for its worst month in nearly 17-1/2-years, as rising inflation expectations on the back of the U.S.-Israel war with Iran battered non-yielding assets such as metals.
At 15:55 ET (19:55 GMT), spot gold rose 3.8% to $4,682.23/oz, while gold futures added 3.4% to $4,712.55/oz.
Discover more insights on precious metals on InvestingPro Trump looking to end military action in Iran Metal markets were encouraged by a Wall Street Journal report that President Donald Trump was considering ceasing military action in Iran, as the conflict looked to extend beyond his initial four-to-six-week timeline.
According to WSJ, the president and his aides gauged that a mission to reopen Hormuz will likely push the conflict beyond his initial timeline, and could also involve a complex military operation. Trump decided that the U.S. could wind down hostilities with Iran after achieving its main goals of denting Iran’s navy and missile capabilities.
Washington will then pressure Tehran diplomatically to reopen the strait, and could also press Gulf and European allies to take point on the reopening, WSJ said.
The report drummed up some hopes of an end to the conflict, although a continued closure of the Strait of Hormuz -- which supplies 20% of the world’s oil -- is likely to keep energy and inflation concerns in play.
Trump tells countries to ’just take’ the strait Trump on Tuesday called on countries unable to get jet fuel because of the Strait of Hormuz’s closure to "number 1, buy from the U.S., we have plenty, and Number 2, build up some delayed courage, go to the Strait, and just TAKE IT."
"You’ll have to start learning how to fight for yourself, the U.S.A. won’t be there to help you anymore, just like you weren’t there for us," the president added.
U.S. Secretary of War Pete Hegseth later reiterated Trump’s remarks at a press conference.
"There are countries around the world who ought to be prepared to step up on this critical waterway as well," Hegseth told reporters, adding that there were "many more vessels" flowing through the strait than before.
Gold heads for worst month in nearly two decades Bullion this week also got a boost from Federal Reserve Chair Jerome Powell’s comment that long-term inflation expectations remain anchored past any near-term shocks.
Despite this week’s gains, spot gold was headed for its worst monthly performance since October 2008, down 11.3% in March. Spot gold was also set to snap a seven-month winning streak.
The yellow metal was battered by growing doubts over more interest rate cuts by the Fed, especially as the onset of the Iran war boosted oil prices and ramped up expectations of higher inflation.
Some major central banks, including the European Central Bank and the Bank of Japan, also signaled potential rate hikes to quell energy-fueled inflation, driving up yields and denting the appeal of non-yielding assets.
This trend left other precious metals also headed for deep monthly declines. Spot silver on Tuesday jumped 7.1% to $75.1035/oz, but was on track for a March slide of nearly 20%. Spot platinum added 3.2% to $1,967.00/oz, but was headed for a monthly decrease of 18%.
