- Kevin Warsh's debut Fed press conference due this week
- Singapore to establish OTC gold clearing system
- Palladium gains more than 5%
June 15 (Reuters) - Gold prices rose more than 3% on Monday, climbing to an over one-week peak after Iran and the U.S. agreed to halt their war, a move that eased expectations of higher interest rates.
Spot gold was up 3.3% at $4,356.79 per ounce as of 10:35 a.m. EDT (1435 GMT), after hitting its highest since June 5 earlier in the session. U.S. gold futures climbed 3.3% to $4,378.70.
The U.S. dollar index was down 0.2%, making metals priced in the greenback more affordable for holders of other currencies.
While still a framework, the deal to end the war and reopen the Strait of Hormuz marked a major breakthrough and sent oil prices falling. The memorandum of understanding is scheduled to be officially signed on Friday in Switzerland.
"The gold market is moving past the conflict and pricing it out. The peace deal news took down Treasury yields, the dollar and oil, and those were the biggest inflation and cross asset risks," said Phillip Streible, chief market strategist at Blue Line Futures.
Gold has faced pressure since the Iran conflict began as higher energy prices raised the chances of interest rate hikes, which tend to weigh on the non-yielding asset.
After the framework deal, traders cut the odds of a U.S. rate hike in December to 52.5% from nearly 70% last week, according to the CME FedWatch tool.
Attention is now turning to the Federal Reserve's June 16–17 policy meeting, Chair Kevin Warsh's first at the helm, as markets look for clues on the interest-rate outlook.
Gold's next price move all comes down to Warsh, his tone, and what he is going to say about the interest rate path, said Streible.
Meanwhile, Singapore will establish an over-the-counter gold clearing system and introduce central bank gold-vaulting services, the deputy prime minister said.
Among other metals, spot silver rose 4.3% to $70.88 per ounce, platinum gained 4.3% to $1,791.13, and palladium jumped 5.6% to $1,355.00.
Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Shailesh Kuber and Jan Harvey
Source: Reuters