Gold holds gain as US-Iran ceasefire extension calm inflation fears.

The effective closure of the Strait of Hormuz has sent an inflationary shock through the global economy, fuelling concerns that central banks may need to keep interest rates higher for longer. Bullion typically performs worse in a higher rate environment as it pays no interest.

Reflecting the pressure, US consumer spending edged up in April, with annual inflation accelerating to the highest since 2023, latest data show. The US economy expanded in the first quarter at a 1.6 per cent annualised pace, slower than previously estimated.

Bullion has traded in a narrow range since its initial slump at the start of the war as traders weighed conflicting signals about progress toward a ceasefire, and is down nearly 15 per cent since late February.

Spot gold was little changed at US$4,496.65 an ounce at 7:18 am in Singapore. Silver was 0.2 per cent higher at US$75.78. Platinum and palladium were little changed. The Bloomberg Dollar Spot Index, a gauge of the US currency, was flat after dipping 0.2 per cent in the previous session.

Source: businesstimes