Gold prices rose on Tuesday. US President Donald Trump’s comments on the Middle East war pushed oil prices lower. This helped calm concerns about inflation.
Spot gold gained as much as 1.8%, reaching about $5,240 an ounce. US gold futures increased 2.7%. Silver also climbed 2%, moving toward the $90-per-ounce mark.
Bullion had fallen on Monday as the Middle East conflict continued. Prices rebounded after Trump stated the conflict would “be ended soon” in a news conference. Oil prices, which rose over 30% since the war began, then tumbled.
Lower oil prices eased worries that high inflation would stop the US Federal Reserve from cutting interest rates. Rate cuts typically benefit assets like gold. Bart Melek, a commodity strategist, noted that traders now expect the central bank to cut rates this year.
Before Trump’s speech, investors expected the Fed to hold or raise rates to control energy-driven inflation. This capped gold prices, which fell 3% last week. Exchange-traded funds saw a 30-tonne outflow of gold, the largest in over two years. Despite this, gold has gained about 20% this year.