Gold extended gains in Asian trading after U.S. President Donald Trump said he had postponed a planned attack against Iran and that negotiations were ongoing. The comments helped relieve some of the pressure that had been building on precious metals amid a bond-market rout.
Market moves and prices
Spot gold was up 0.1% at $4,570.31 an ounce by 20:39 ET (00:39 GMT). Gold futures rose 0.3% to $4,574.0/oz. The uptick in gold came as U.S. Treasury yields pulled back from recent strength and oil prices fell sharply after the president's announcement.
Linkages across commodities and bonds
Strength in gold was accompanied by a drop in crude oil, following Mr. Trump's statement that he had delayed the planned military operation against Iran and that "serious negotiations" were taking place. Those remarks prompted some hopes for a de-escalation in the U.S.-Israel war on Iran, a development that market participants interpreted as likely to limit the conflict's inflationary impact if a rapid resolution were achieved.
The temporary easing in geopolitical risk helped arrest a prolonged sell-down in the bond market that had driven yields higher and weighed on gold. U.S. 10-year yields fell 0.6% on Monday evening, while Japanese 10-year bonds cooled slightly from 29-year peaks.
Oil prices dropped sharply after the comments, although crude remained notably elevated overall. Market participants noted that flows through the Strait of Hormuz were still running at a fraction of pre-war levels, keeping a premium on crude despite the fall.
The dollar also softened following the president's remarks, providing additional support to precious metals. Other metals moved higher as well, with spot silver up 0.6% at $78.1120/oz and spot platinum rising 0.1% to $1,987.50/oz.
Summary
Gold rose modestly in Asian trading after President Trump said he had postponed an attack on Iran and that negotiations were under way. Falls in U.S. Treasury yields and oil prices, together with a weaker dollar, underpinned moves in precious metals and helped pause a recent bond-market sell-off.
Key points
- Gold firmed after President Trump said he postponed a planned strike on Iran and reported ongoing negotiations.
- U.S. 10-year yields retreated by 0.6% on Monday evening; Japanese 10-year yields eased from 29-year highs.
- Oil prices dropped sharply, though crude remained elevated as Strait of Hormuz flows stayed below pre-war levels.
Risks and uncertainties
- Geopolitical uncertainty remains a risk to energy markets and inflation expectations, affecting oil, bond yields, and inflation-sensitive sectors.
- The durability of the bond-market pause is uncertain; renewed selling in sovereign debt could again pressure gold.
- Crude prices remain elevated because Strait of Hormuz flows are still constrained, leaving energy markets exposed to further disruption.