Gold steady as US-Iran peace deal hopes offset inflation fears

Synopsis

Gold prices held steady as optimism surrounding a potential U.S.-Iran peace deal countered concerns over oil-driven inflation and rising global interest rates. While U.S. Treasury yields and oil prices dipped on hopes of a Middle East accord, Federal Reserve minutes indicated a potential for policy firming if inflation persists above target.

Gold held steady on Thursday, as fears of oil-driven inflation and higher global interest rates were offset by optimism around a potential U.S.-Iran peace deal.

FUNDAMENTALS

* Spot gold was unchanged at $4,543.96 per ounce by 0104 GMT. Bullion gained more than 1% on Wednesday after falling to its lowest level since ‌March 30 earlier ⁠in ⁠the day.

* U.S. gold futures for June delivery gained 0.2% to $4,545.50.

* U.S. President Donald Trump on Wednesday said negotiations with Iran were in the final stages but warned of further attacks unless Iran agreed to a deal, adding that Washington could wait a few days to "get the right answers."

* Iran warned against renewed attacks. "If aggression against Iran ⁠is repeated, ‌the promised regional war will extend beyond the region this time," the Revolutionary Guards said in a statement.

* U.S. ⁠Treasury yields and oil prices fell on Wednesday as hopes increased that the U.S. is nearing a deal with Iran to end the war in the Middle East, while major stock indexes rose. [MKTS/GLOB]

* Minutes of the Federal Reserve's April meeting showed a majority of Fed policymakers felt "some policy firming would likely become appropriate" if inflation stays persistently above the central ‌bank's 2% target.

* Fed officials also noted that a steady jobless rate and two months of stronger-than-expected job creation indicate the employment market remains ⁠resilient and is not in need of lower interest rates to prop it up.

* SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.2% to 1,041.74 metric tons on Tuesday. [GOL/ETF]

* Spot silver was steady at $75.96 per ounce, platinum lost 0.2% to $1,947.37, and palladium fell 0.1% to $1,368.75.

DATA/EVENTS (GMT)

1230 US Housing Starts Number Apr

1230 US Initial Jobless Clm May 16, w/e

1230 US Philly Fed Business Indx May

1345 US S&P Global Mfg, Scvc, Comp PMI Flash May

1400 EU Consumer Confid. Flash May

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