PRECIOUS-Gold steady as Trump's Iran war deadline nears
By Ashitha Shivaprasad
April 6 (Reuters) - Gold prices steadied on Monday, as market participants waited to see whether ceasefire negotiations could avert an escalation in the U.S.-Israeli war on Iran as a deadline to reopen the Strait of Hormuz nears.
Spot gold XAU= was little changed at $4,669.27 per ounce by 11:22 a.m. ET (1522 GMT) after falling 1% earlier in the session. U.S. gold futures GCcv1 rose 0.3% to $4,694.50.
On the eve of a U.S. deadline, the United States and Iran were weighing the framework of a plan to end their five‑week-old conflict, even as Tehran pushed back against pressure to swiftly reopen the Strait of Hormuz. U.S. President Donald Trump has threatened to rain "hell" on Tehran if it did not make a deal by the end of Tuesday.
"Focus is likely to remain on the war and interest rates. If the conflict drags on, oil will grind higher amid tightening supply conditions, adding to inflationary pressures," said Bart Melek, global head of commodity strategy at TD Securities.
"That leaves central banks, particularly the Federal Reserve, with less room to ease policy and could even revive discussions about higher rates if energy prices rise further, which is negative for gold."
Oil prices inched up in choppy trading on Monday, and they have risen sharply since the conflict began. O/R
Gold is widely regarded as a hedge against geopolitical risks and inflation, but because it yields no interest, it tends to be less attractive when interest rates are high.
Other items on investors’ radar include minutes of the Fed’s March policy meeting due on Wednesday, U.S. Personal Consumption Expenditures (PCE) data due on Thursday, and the Consumer Price Index (CPI) on Friday.
The U.S. central bank held rates last month and a majority of traders now see no chance of the Fed cutting interest rates this year, according to CME’s FedWatch tool.
Spot silver XAG= fell 0.9% to $72.32 per ounce, platinum XPT= lost 0.9% to $1,971.04, and palladium XPD= was down 1.1% at $1,486.03.
