Gold Holds Rebound Near $4,385 After Trump Signals Brief Iran Conflict
Summary
- Spot gold prices extended their rebound, trading near $4,385 an ounce and rising 0.1% from the previous session to $4,386.94.
- Trump's remarks on Iran helped cool gains in oil prices and ease inflation concerns, supporting gold prices.
- A weaker dollar and softer expectations for additional US interest-rate increases supported gold by reducing the cost of buying gold.
Forecast Trend Report by Period
Gold held its rebound after President Donald Trump signaled any military action involving Iran would be short-lived, easing fears of a prolonged Middle East conflict. Softer expectations for additional US interest-rate increases also supported prices.
Bloomberg reported that spot gold traded around $4,385 an ounce in Singapore on September 2. As of 7:56 a.m., it was up 0.1% from the previous session at $4,386.94. Gold rose 1% a day earlier, snapping a three-session losing streak.
Trump's remarks helped cool gains in oil prices, which also influenced the gold market. Renewed hostilities between the US and Iran had stoked concern over a drawn-out conflict and inflation fueled by surging energy costs, but some of that anxiety eased after his comments.
A weaker dollar also underpinned gold. The yen surged a day earlier, focusing attention on the possibility of additional support measures by Japanese authorities, and the dollar fell. A softer dollar typically makes gold cheaper for investors holding other currencies.
Expectations for further US rate increases also softened. John Williams, president of the Federal Reserve Bank of New York, said there are signs inflation continues to slow as the effects of tariffs on prices fade. He also said rising energy costs are not spreading broadly into other service prices.
A slowdown in US private-sector job growth last month further reduced expectations for a rate increase. Federal Reserve Chair Kevin Warsh had sharply lifted expectations for a hike this month after signaling in a Jackson Hole speech last week that additional tightening remained possible to curb inflation.
Meanwhile, spot silver rose 0.1% to $65.38 an ounce. Platinum and palladium were little changed, while the Bloomberg Dollar Spot Index was flat after falling 0.2% a day earlier.
