Gold and Silver Up Ahead of Fresh US-Iran Negotiations

 

Gold and Silver Up Ahead of Fresh US-Iran Negotiations

(Bullion News Network) – Gold and silver prices increased on Monday as Iran submitted its latest peace proposal for the United States to review. The spot price of gold jumped marginally, adding less than $30 per troy ounce. Silver prices increased by a larger percentage, gaining nearly $1.75/ozt. The price action favored silver, driving the gold-silver ratio higher. Platinum-group metals moved little, with both platinum and palladium gaining less than $5/ozt.

The conflict between the U.S. and Iran, which has effectively closed the Strait of Hormuz for the past two months, remains a major driver of prices across all American markets. The standard benchmark for crude oil prices, Brent Crude, is slated to close Monday’s trading session well above $100 per barrel.

Over the weekend, Iran sent a fresh peace proposal to the United States via Pakistan, which has been acting as an intermediary since negotiations began last month. The precise details of the deal are not yet clear, but regional officials claim that a new proposal is being delivered to the United States government.

U.S. President Donald Trump claimed in a Truth Social post to have postponed a planned attack on Iran, citing “serious negotiations” and requests from leaders in the Middle East as reasons for the postponement.

I have been asked by the Emir of Qatar, Tamim bin Hamad al Thani, the Crown Prince of Saudi Arabia, Mohammed bin Salman Al Saud, and the President of the United Arab Emirates, Mohamed bin Sayed Al Nahyan, to hold off on our planned Military attack of the Islamic Republic of Iran, which was scheduled for tomorrow, in that serious negotiations are now taking place, and that, in their opinion, as Great Leaders and Allies, a Deal will be made, which will be very acceptable to the United States of America, as well as all Countries in the Middle East, and beyond.

Trump specified that an acceptable deal will include no nuclear weapons for Iran.

Traders will hear from several officials at the Federal Reserve this week, including Atlanta Fed First Vice President Cheryl Venable, Fed governor Christopher Waller, Philadelphia Fed President Anna Paulson, Richmond Fed President Tom Barkin, and Fed governor Michael Barr.

Where economic reports are concerned, there are two big ones to look out for. Thursday will see the release of a fresh initial jobless claims report, which should give traders a decent short-term glance at the labor economy. On Friday, traders will also be able to review the May consumer sentiment report and a U.S. leading economic indicators report for the month of April.

Monday also saw a minor movement in June’s Fed interest rate projections. CME FedWatch now projects a 0% probability that the FOMC votes to cut interest rates in June, compared to a 0.6% chance that the committee votes to raise interest rates by 25 basis points.

June’s meeting will be notable, as it will be the first meeting of the Federal Open Market Committee headed by Kevin Warsh, who was confirmed as chair of the Federal Reserve last week. Warsh will contend with a historically divided FOMC to start his tenure in the role. The April FOMC meeting saw four dissents, the most since 1992. Three of the dissenters disagreed with the “rate cut bias” present in the final interest rate decision, suggesting that the road to easing monetary policy may remain difficult.

Ongoing negotiations between the U.S. and Iran are likely to remain significant price drivers for precious metals throughout the week. This week’s slate of economic reports seems unlikely to have an outsized impact on rate cut expectations, but a major shock in either the leading economic indicators report or the initial jobless claims report could inject a bit more volatility into markets.