Gold’s Fall Reverses After Trump Signals ‘Productive’ Talks With Iran

Key Takeaways

Precious metal markets took a breather from their weekend tumble after President Trump indicated the U.S. had “good and productive” talks with the Iranian leadership.

Gold traded around $4,500 an ounce, and silver at $70, Monday morning. President Donald Trump seems to have soothed the precious metals market. Gold had tumbled over the weekend, falling into bear-market territory as it sank to around $4,150 per troy ounce on Sunday, off nearly 25% from its record high. Prices recovered Monday morning after Trump said the U.S. and Iran had “very good and productive conversations” about resolving conflicts in the Middle East. Gold was trading at around $4,500 as of Monday morning, while silver recovered more swiftly; the SPDR Gold Trust (GLD) was recently about flat, while the iShares Silver Trust (SLV) was up about 3%. WHY THIS MATTERS TO YOU Global markets are whipsawing following President Trump’s latest missive, which raises the prospect of a resolution in Iran that has lifted the stock market. Some Middle East experts, however, are saying the war is far from over. The pivot echoed price moves across other major asset classes. Crypto markets surged, with bitcoin trading above $71,000 as investors digested the latest news around the war in Iran. What’s next, however, remains uncertain, with markets and Middle East experts still harboring questions about whether the Strait of Hormuz might reopen, who will control the trade passageway, and if Israel will agree to a truce. “There’s a lot of uncertainty still, but it’s much better for markets than what it looked like just 10 minutes ago,” Allianz chief economic advisor Mohamed El-Erian said in an interview with CNBC shortly after Trump’s social media post. “The big question for me right now is not only do these talks continue constructively but can you get Israel to buy in as well.” The Trump administration’s goals appear to have shifted from regime change to reopening the strait, said former senior Israel defense intelligence officer and analyst Danny Citrinowicz on social media. While a path to a de-escalation has emerged, the “conflict isn’t over,” he said. “Still, one key question remains—if in five days Iran hasn’t reopened the Strait, it’s unlikely that threats alone will change that.” he said. Meanwhile, the U.S. dollar has retreated, which bodes well for precious metal prices, since gold is usually paid for in dollars, making it more appealing when the greenback softens. A rally in risk assets at large, meanwhile, appears to be putting wind in crypto markets.