Gold Edges Up as Traders Weigh US-Iran Ceasefire Talks and Rate Outlook
By Aboki Forex —
Gold prices inched higher on Wednesday as investors digested conflicting signals over a potential US-Iran ceasefire deal and weighed the impact of elevated energy costs on central bank policy.
Bullion gave up some of its earlier gains but still traded about 0.5% higher. President Donald Trump said he called off plans to attack Iran on Tuesday because serious negotiations are now taking place. However, the White House said a proposal delivered by Iran through Pakistani mediators on Sunday lacked meaningful improvement, according to Axios.
Iranian news agency Tasnim reported that Tehran described US demands as excessive and said it would not agree to end the war at the expense of its nuclear program.
Gold has traded in a narrow range since falling sharply early in the conflict. Investors are assessing inflation risks that could keep interest rates higher, a negative for non-yielding bullion. Still, concerns about economic growth could prompt monetary easing as the war drags on. Since the conflict began, gold has dropped more than 13%.
Analysts at JPMorgan Chase, including Gregory Shearer, said new investment interest in precious metals has dried to a trickle on worries over higher interest rates. They noted that a resolution to the conflict is key to reviving demand, though central bank purchases should provide support.
In the ETF space, Jane Street Group LLC slashed its exposure to the iShares Silver Trust in the first quarter. Its holdings fell by 11.8 million shares by the end of March, according to Bloomberg data from a 13F filing. It is unclear if the move was for clients or proprietary trading.
Citadel Advisors LLC added 2.2 million shares of the silver ETF in the same period. Jane Street’s holdings in the SPDR Gold Shares ETF slipped by 867,074 shares during the first quarter. Citadel’s holdings in the gold ETF tumbled by 1.5 million shares over the same timeframe. Virtu Financial LLC sold all of its gold ETF holdings, unloading nearly 1.2 million shares.