Gold prices saw an increase on Wednesday, after dropping to a one-week low in the previous session. The movement gained traction as oil prices fell, thanks to the U.S. prolonging a ceasefire with Iran. This development eased worries about a possible inflation spike and the likelihood of persistently high interest rates. Spot gold rose by 0.6% to $4,739.94 per ounce, as of 0105, after hitting its lowest level since April 13 in the previous session. Gold futures in the U.S. for June delivery rose by 0.8%, hitting a price of $4,758.60. On Tuesday, U.S. President Donald Trump revealed his choice to prolong the ceasefire with Iran indefinitely, just hours before it was set to expire.
Trump’s announcement appeared to be a one-sided choice, and it was unclear if Iran or the U.S. ally Israel would agree to extend the ceasefire that began two weeks ago. Stocks rose, the dollar weakened, and oil prices fell following the extension of the ceasefire. Federal Reserve chief nominee Kevin Warsh stated on Tuesday that he had made no commitments to Trump regarding interest rate cuts, as he sought to reassure U.S. senators considering his confirmation to lead the central bank that he would operate independently of the White House while advocating for comprehensive reforms.
Meanwhile, Trump on Tuesday conveyed his disappointment if Kevin Warsh does not implement an immediate reduction in interest rates after his confirmation by the Senate. Gold exports from Switzerland saw a 30% rise month-on-month in March, with shipments to Britain hitting their highest level since December and supplies to China, a major consumer of bullion, increasing by 18%.
U.S. retail sales saw a larger-than-expected increase in March, influenced by the situation with Iran that pushed up gasoline prices and revenue at service stations, while tax refunds supported spending in other areas. SPDR Gold Trust, known as the largest gold-backed exchange-traded fund in the world, announced a decrease in its holdings by 0.1%, resulting in a total of 965.94 metric tons on Monday. Spot silver rose by 1% to $77.47 per ounce, platinum increased by 0.8% to $2,052.99, and palladium saw a 1.3% gain at $1,552.75.