Spot Gold edged lower on Thursday, while oil prices extended gains, as investors continued to monitor whether the fragile ceasefire between the US and Iran will hold.
US President Donald Trump said on Tuesday he would indefinitely extend the ceasefire with Iran so that further peace talks could take place, while awaiting a “unified proposal” from Tehran.
Iran vowed not to reopen the Strait of Hormuz amid the US naval blockade despite the ceasefire extension. Iranian parliament speaker and chief negotiator Mohammad Bagher Ghalibaf said that reopening the strait would be “impossible” while the United States and Israel continue what he called “flagrant” ceasefire violations, including the US naval blockade.
According to the Wall Street Journal, Iranian forces fired on three ships in the Strait of Hormuz and escorted two of them into Iranian waters on Wednesday. Iranian media reported that the paramilitary Revolutionary Guard was transporting the vessels to Iran, signaling a further escalation. Yet, White House press secretary Karoline Leavitt said the seizures did not violate the terms of the ceasefire.
The ongoing disruption in the Strait of Hormuz has kept energy markets tight and inflation risks elevated. Higher energy costs have added to concerns over sustained inflation and reduced the probability of near-term interest rate cuts by central banks, which weighed on non-interest-bearing Gold.
Spot Gold was last down 0.51% on the day to trade at $4,716.41 per troy ounce.
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