Market Highlights
On Thursday, the precious metals market saw an upward trend, primarily driven by a weakening dollar and optimistic sentiment surrounding positive diplomatic talks between the U.S. and Iran.
Spot gold rose 0.4%, reaching $4,808.42 per ounce. Gold futures contracts increased by 0.1% in early Thursday trading, priced at $4,828.71 per ounce.
Other precious metals also performed well. Spot silver increased by 0.6%, reaching $79.41 per ounce, while spot platinum rose by 1.2%, priced at $2,138.32 per ounce.
U.S.-Iran Diplomatic Dynamics
According to the Wall Street Journal, the U.S. and Iran have reached a preliminary consensus to hold more negotiations. A preliminary diplomatic meeting held over the weekend in Pakistan failed to reach an immediate agreement.
Insiders told the Wall Street Journal that the two sides have yet to determine the specific time and location for the next meeting. Currently, the ceasefire agreement between the two countries is set to expire on April 21.
President Trump stated on Thursday that dialogue between Israel and Lebanon is expected to begin soon. Israeli officials confirmed the planned talks, but the Associated Press reported that Lebanese authorities have not yet received any notification.
Despite diplomatic progress, regional tensions remain. Senior Iranian military leaders warned the U.S. to stop its maritime blockade of Iranian port facilities. The U.S. Central Command reported that no vessels or oil tankers related to Iran have successfully breached this blockade.
Energy Market and Monetary Policy Outlook
Amid concerns over inflation, the market has begun speculating that central banks, including the Federal Reserve, may raise interest rates. Typically, higher rates diminish the appeal of gold, as it does not yield returns.
However, with the progress in diplomatic negotiations, expectations for rate hikes have softened. Over the past week, spot gold has accumulated a 0.9% increase.
Meanwhile, the dollar has also retreated in March, primarily serving as a safe-haven asset. Market participants believe that the U.S. is relatively secure in its oil supply in the Strait of Hormuz, given its status as a major energy exporter.
A weaker dollar typically lowers the cost of purchasing gold with other currencies, potentially boosting demand. The next round of negotiations between the U.S. and Iran has yet to be scheduled, with the April 21 ceasefire deadline approaching.