Gold Surges on Trump's Iran Diplomacy Push
The price of gold surged on Monday after US President Donald Trump announced that fresh negotiations with Iran would begin, easing concerns over a potential interest-rate hike. The move raised hopes for a breakthrough in the months-long conflict, which has driven energy prices higher and fueled inflation.
Trump's decision to pursue diplomacy came after he called off a massive attack on Iran at the request of allies in the Middle East, including Saudi Arabia. This shift in policy sent benchmark Brent crude plummeting by more than 7%.
Bullion traders are also keeping a close eye on the Federal Reserve's next steps following reports that Chairman Kevin Warsh is considering reducing the frequency of policy meetings. Any reduction would mark a significant shift for the US central bank, which currently meets eight times a year and last Wednesday voted to hold interest rates steady.
The move could have implications for gold prices, as investors have criticized Warsh's attempts to limit guidance on the direction of rates. The three officials who dissented in the previous vote warned that waiting too long to act could risk the need for even more aggressive policy moves later.