Gold steadies as traders track Iran talk prospects, US midterms - The Straits Times

The precious metal’s movement has been choppy this week on conflicting signals on the progress of US-Iran talks.

Gold held a decline as traders tracked diplomacy efforts in the Middle East and the outcome of US midterm elections for clues on the path for interest rates and American fiscal policy.

Bullion was hovering around US$3,930 an ounce, following a modest retreat in the previous session that came after a jump of almost 2% on Nov 2.

The precious metal’s movement has been choppy this week on conflicting signals on the progress of US-Iran talks, making the impact of energy prices on inflation difficult to gauge.

Oil continued to fluctuate after shifting in a range of around US$5 a barrel on Nov 3.

Tehran and Washington are reviewing fresh proposals from mediators on how to resolve their differences and avoid a return to all-out war, according to a diplomat briefed on the matter. That came after limited US airstrikes reportedly hit targets on the Iranian island of Qeshm inside the Strait of Hormuz the night of Nov 2. 

Oil prices had soared over October on worsening tensions but sharply reversed course this week on signs the White House is willing to allow more time for a diplomatic resolution.

Crude and gold have mostly moved in opposite directions in recent weeks, with elevated energy prices fuelling expectations of tighter monetary policy – a headwind for the non-yielding metal.

The precious metal slumped almost 7% in October, slipping below the US$4,000 an ounce threshold at the end of the month when a retreat from AI prompted investors to liquidate bullion holdings to cover losses elsewhere.

It is down around 25% since the US-Iran conflict erupted in late February, as accelerating inflation has spurred tighter monetary policy.

Americans are casting their votes in midterm elections that will determine who controls the House and the Senate. The outcome is likely to shape the US fiscal policy outlook, indirectly affecting gold.

Spot gold was 0.2% higher at US$3,938.47 an ounce at 8.17am in Singapore, while silver was steady at US$49.81. Platinum and palladium edged higher.

The Bloomberg Dollar Spot Index, a gauge of the US currency, was 0.1% lower after rising 0.3% in the previous session. BLOOMBERG