Prices for gold and other precious metals are rising steadily on Monday amid reports that the U.S. and Iran have reached agreements that will bring an end to hostilities in the Middle East and resume shipping through the Strait of Hormuz.
Representatives of the two countries will sign a memorandum of understanding on June 19 in Switzerland, Pakistani Prime Minister Shahbaz Sharif announced on social media platform X.
U.S. President Donald Trump stated on Sunday that the Strait of Hormuz will be open to shipping and that the U.S. blockade of Iranian ports will be lifted.
Against this backdrop, oil prices are falling, and traders are revising their forecasts regarding the Federal Reserve’s (Fed) future policy. Expectations of a rate hike by the U.S. central bank amid rising inflationary pressures have contributed to the recent decline in the price of gold. The prospect of higher rates traditionally puts pressure on the precious metals market, as investments in these assets do not generate interest income.
The spot price of gold, as of 1:15 p.m. local time, rose 2.8% to $4,338.06 per ounce. August gold futures on the Comex rose 2.9% to $4,360.20 per ounce.
“Market participants are pricing out the likelihood of a Fed rate hike following the decline in oil prices, which is providing support for the precious metal,” notes UBS analyst Giovanni Staunovo.
“In the near term, I expect some consolidation in the market until there is greater clarity on the Fed’s stance later this week,” the expert says.
The next meeting of the U.S. central bank will take place on June 16–17. It will be Kevin Warsh’s first as Fed chair. The consensus forecast by experts, as cited by Trading Economics, predicts that the U.S. central bank will keep its benchmark interest rate in the range of 3.5–3.75%.
The spot price of silver rose 4% during Monday’s trading to $70.66 per ounce, platinum rose 3.3% to $1,774.89 per ounce, and palladium rose 4.8% to $1,344.06 per ounce. Prices for gold and other precious metals are rising steadily on Monday
