Gold prices rose on Wednesday as declining oil prices eased inflation concerns, while investors awaited a series of U.S. economic data releases this week to assess the outlook for Federal Reserve policy.
Spot gold increased by 0.4% to $5,213.99 per ounce as of 01:09 GMT. Meanwhile, U.S. gold futures for April delivery fell by 0.4% to $5,221.80.
The United States and Israel carried out strikes on Iran in what the U.S. Department of Defense (Pentagon) and observers on the ground described as the most powerful airstrikes of the war, despite global market expectations that President Donald Trump would seek to end the conflict soon.
The war led to the closure of the Strait of Hormuz, a vital route for about one-fifth of the world’s oil and liquefied natural gas. This halted oil tanker traffic for more than a week and forced producers to stop production as storage facilities filled up, driving energy prices higher.
In a statement, U.S. Central Command announced that the military “destroyed” 16 Iranian mine-laying vessels near the Strait of Hormuz on Tuesday.
Oil prices later declined, easing inflation fears, a day after Trump predicted a quick end to the war with Iran. The Wall Street Journal also reported that the International Energy Agency had proposed the largest-ever release from strategic oil reserves.
Markets are now awaiting the U.S. Consumer Price Index (CPI) for February, due later today, and the Personal Consumption Expenditures (PCE) index— the Federal Reserve’s preferred measure of inflation—scheduled for release on Friday.
According to the CME Group’s FedWatch tool, investors expect the Federal Reserve to keep interest rates unchanged within the current range of 3.5% to 3.75% at the end of its two-day meeting on March 18.
Among other precious metals, spot silver rose 0.6% to $88.89 per ounce, platinum gained 1% to $2,221.48, and palladium increased 1.5% to $1,679.73.
Reuters
