Gold climbs as oil and the dollar weaken early Wednesday after U.S. President Donald Trump said he would extend the ceasefire with Iran.
The precious metal has declined on hawkish news since the war began as oil and the dollar have strengthened, while the reverse is true when there’s news of a possible ceasefire or detente. A weaker dollar makes gold a more attractive investment to holders of other currencies.
June gold futures slid 2.3% Tuesday to $4,719.60 an ounce on Comex, and the most-active contract dropped 3.3% in the first two days of the week. Bullion slid 11% in March after climbing 11% in February and rising 9.3% in January. It rallied 64% last year. The June contract is currently up $52.90 (+1.12%) an ounce to $4772.50 and the DG spot price is $4749.20.
Trump said Tuesday that he would extend a ceasefire with Iran indefinitely while at the same time maintaining a blockade of the critical Strait of Hormuz, through which about a fifth of the oil consumed around the world each day typically passes. The president said he was awaiting a “unified proposal” from Tehran. The previous ceasefire was set to expire Tuesday.
But signals were mixed as the White House said Vice President JD Vance was no longer traveling to Pakistan for a second round of truce talks. Iran has declined to participate.
Meanwhile, investors were also watching economic news, including U.S. retail sales data, which climbed by the most in a year, and hearings to confirm Trump’s nominee to lead the Federal Reserve after Jerome Powell – Kevin Warsh.
At a time when economists and investors are closely tracking the effect of the war on inflation and projecting that the Fed will likely keep interest rates elevated to keep inflation in check, Warsh said that the Fed needed a new framework for dealing with persistent inflation. He didn’t offer specifics.
Trump has long called for lower interest rates, something that has put him and Powell at loggerheads. Walsh has been expected to follow the president’s agenda, but he said he would be “an independent actor” if confirmed to the chairmanship.
The Iran war has erased expectations that the Fed would cut interest rates this year. Most investors tracked by the CME FedWatch Tool now expect the central bank to keep U.S. interest rates unchanged until the middle of next year. Over 99% of the investors tracked by the tool are betting on rates staying unchanged at the next policy meeting next week.
Fed policymakers last month kept interest rates unchanged again at 3.50% to 3.75%. The Fed has kept interest rates unchanged this year after three previous rate cuts. The central bank began raising interest rates in March 2022 to fight inflation, ultimately imposing increases of by 5.25 percentage points before beginning rate cuts in 2024.
Front-month silver futures fell 4.4% Tuesday to settle at $77.04 an ounce on Comex, and the July contract decreased 6.5% in the first two days of the week. The most-active contract touched a record above $115 in January. Silver dropped 20% last month after gaining 19% in February and advancing 11% in January. It rose 141% last year. The May contract is currently up $1.677 (+2.19%)an ounce to $78.165 and the DG spot price is $78.10.
Spot palladium declined 1.4% Tuesday to $1,546.00 an ounce and has retreated 2.3% so far this week. Palladium tumbled 17% in March after gaining 8.8% in February and advancing 2.4% in January. Palladium rose 74% last year. Currently, the DG spot price is up $28.30 an ounce to $1572.00.
Spot platinum lost 2.6% Tuesday to $2,031.30 an ounce and is down 4.3% so far this week. It declined 17% in March after advancing 15% in February and gaining 1.4% in January. Platinum increased 122% in 2025. The DG spot price is currently up $55.50 an ounce to $2093.30.
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