Gold (GC=F) continued to march higher on Friday after President Trump reset the deadline for Iran to come to the table to agree a ceasefire deal.
Bloomberg reports:
Bullion rose as much as 2.3% to top $4,475 an ounce, having fallen almost 3% in the previous session as doubts grew over a potential ceasefire agreement. Trump pledged to refrain from attacks on Iranian energy sites for a further 10 days, offering a brief respite to markets jolted by nearly a month of conflict.
Since the war began nearly a month ago, gold has fallen about 15%, moving largely in tandem with stocks and in an inverse relationship with oil. Spiking energy prices have raised the risk of inflation and led investors to bet that central banks will keep interest rates unchanged, or hike them. That’s a headwind for non-yielding bullion.
Adding further downward pressure, Turkey’s central bank sold and swapped about 60 tons of gold – worth more than $8 billion – during the first two weeks of the war, marking a sharp drawdown in reserves, according to people familiar with the matter. Elevated central-bank buying had been a pillar of bullion’s rally over the last couple of years.