Gold and Silver Experience Fluctuations Amid War Developments

SadaNews - Gold stabilized significantly as traders assessed the latest U.S. and Iranian efforts to reach a negotiated solution to the two-month-long war, which has strangled energy supplies and raised inflation risks.

The precious metal recorded about $4657 per ounce after a decline of 0.6% on Monday.

U.S. President Donald Trump held a national security officials meeting to discuss the latest Iranian peace proposal, but he maintained red lines in any agreement to end the conflict, according to White House spokesperson Caroline Levitt.

Iranian Proposal to Reopen Hormuz

These statements came after reports indicated that Tehran proposed a temporary agreement to reopen the Strait of Hormuz in exchange for Washington lifting its blockade on ships going to and from Iranian ports.

This blockade has reduced daily transit through this strategic waterway to almost zero, strangling flows of crude oil, natural gas, and petroleum products. The Iranian proposal also includes postponing more complex negotiations regarding the country's nuclear program.

Mark Loefert, a trader at Heraeus Precious Metals, wrote in a memo that "the indefinite extension of the ceasefire, with Hormuz still closed, prolongs the uncertainty in the markets." He added: "In the long term, a mix of economic recession and rising prices may provide fertile ground for the gold bull market to continue."

Monitoring Interest Rate Decisions and Inflation Effects

Traders will be watching interest rate decisions from the U.S. Federal Reserve, the European Central Bank, and their counterparts in Japan, the UK, and Canada this week.

The energy supply shock caused by the ongoing eight-week conflict has added to inflation risks, increasing the likelihood that central banks will keep interest rates unchanged for longer or even raise them, putting pressure on gold, which yields no return. Gold has lost about 11% since the onset of conflict at the end of February.

Both platinum and palladium also rose. The Bloomberg spot dollar index, a measure of the U.S. currency, slightly decreased after a 0.1% drop on Monday.

Silver Price

Silver prices also recorded near $74 per ounce.