Gold prices surge on Iran tensions.
Gold prices rose sharply in Asian trade on Thursday, as safe haven demand was boosted by heightened concerns over military action with Iran, while President Donald Trump’s comments on trade tariffs elicited a risk-averse reaction.
Bullion prices were already sitting on some gains this week amid increased uncertainty over U.S.-China trade talks. While the talks appeared to have yielded some progress, a lack of clear details on the agreement kept investors largely risk-averse.
Spot gold rose 0.6% to $3,374.94 an ounce, while gold futures for August rallied 1.5% to $3,394.60/oz by 01:24 ET (05:24 GMT).
Gold, metal prices buoyed by haven demand, dollar weakness
Heightened tensions in the Middle East, especially between Iran and Israel, were a key support point for gold, after several reports said Israel was preparing to attack Iran if nuclear talks with the U.S. through.
On Wednesday, Trump confirmed that the U.S. was also pulling out personnel from Iraq and other Middle Eastern countries, amid fears of more military action. Other reports showed Iranian ministers threatening to strike U.S. bases in the region in the event of a conflict.
Dollar hits 7-week lows.
The dollar slid on Thursday on heightened expectations of Federal Reserve rate cuts this year and lingering uncertainty over tariff battles.
U.S. President Donald Trump said on Wednesday he would be willing to extend a July 8 deadline for completing trade talks with countries, but added the U.S. would send out letters in coming weeks specifying the terms of trade deals to dozens of other countries, which they could then embrace or reject.
His comments followed earlier remarks from U.S. Treasury Secretary Scott Bessent that the Trump administration may offer extensions from a July trade deal deadline for countries negotiating in good faith.
Uncertainty over what comes next for global trade, alongside scant details of a framework agreement reached between the U.S. and China this week, dampened the overall mood in markets and gave investors more reasons to sell the dollar.
European stocks slip lower on trade worries.
European stocks mostly fell Thursday on heightening tensions in the Middle East as well as waning confidence in the likely success of the U.S.-China trade agreement.
At 03:05 ET (07:05 GMT), the DAX index in Germany dropped 0.9%, the CAC 40 in France slipped 0.4%, while the FTSE 100 in the U.K. traded largely unchanged.
Slipping U.S./China trade confidence
Confidence in the progress of trade talks between the U.S. and China appears to have retreated overnight, even after U.S. President Donald Trump’s declaration that a trade deal with China was “done.”
China President Xi Jinping is yet to give his approval on the ’deal’, details remain scarce and U.S. export restrictions on high-end artificial intelligence chips are still in place.
Additionally, U.S. President Donald Trump said on Wednesday that he will send letters to major economies setting his planned trade tariffs in the coming weeks, dashing hopes for more trade deals before a July 9 deadline to strike agreements with his administration.
Mounting trade tensions and tariffs have become the single biggest worry for global investors, overshadowing all other economic risks, according to a survey published by British investment manager Schroders (LON:SDR).
Middle East tensions
Also weighing on sentiment Thursday were rapidly rising tensions in the Middle East, after President Trump confirmed that the U.S. was pulling out personnel from Iraq and other Middle Eastern countries amid fears of military action.
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