Gold rises as hopes for US-Iran diplomacy pause oil rally
GLD•Rate expectations and other metals
While the Fed is widely expected to keep interest rates unchanged at next week's meeting, traders are currently pricing a 64% chance of a rate hike in September, according to the CME FedWatch Tool. FEDWATCH
Spot silver XAG= gained 2.2% to $57.67 per ounce, platinum XPT= was up 0.8% at $1,607.20 and palladium XPD= rose 0.8% to $1,263.73.
Oil eases as ceasefire talks and fresh tensions remain in focus
Oil prices softened on Tuesday, with markets weighing reports of mediation efforts between the U.S. and Iran against an exchange of fresh attacks between the two and threats of a naval blockade of Saudi Arabia by Yemen's Houthis. O/R
The Houthis made their announcement despite signs that Tehran and Washington want to resume diplomacy to halt a worsening cycle of attacks that has all but wrecked a fragile interim agreement signed last month.
A senior Iranian official told Reuters on Monday that Tehran had received a proposal from mediators for a 10-day ceasefire in efforts to salvage the interim deal, intended to pave the way to a lasting agreement to end the war.
The recent escalation in the conflict drove oil prices to more than a one-month high on Monday, with a growing chorus of policymakers arguing interest rates may need to rise to beat back persistent inflation.
High interest rates increase the opportunity cost of holding non-yielding bullion.
