Gold Edges Higher As Trump's Message Gives Mixed Signals On Gulf Crisis

(RTTNews) - Adding to last Friday's gains, gold prices moved to the upside on Monday as investors dissected U.S. President Donald Trump's post that raised both optimism that the gulf war would end soon as well as concerns that the war could go on much longer.

Front Month Comex Gold for June delivery has moved higher by $30.70 (or 0.68%) to $4,555.00 per troy ounce.

Front Month Comex Silver for June delivery has surged by $1.229 (or 1.75%) to $71.285 per troy ounce.

After the "pause" announced by Trump on attacks by the U.S. forces on Iran's energy and power installations was set to lapse last Friday, he extended it again until April 6.

Last week, through Pakistan, the U.S. had sent a 15-point-peace proposal to Iran to end the war.

While Pakistan announced hosting a mediation soon, Iran's Parliament Speaker Mohammad Bagher Qalibaf dismissed any such possibility.

The competing claims over progress towards a ceasefire fueled more uncertainty to the global oil trade and economy.

Iran has kept the Strait of Hormuz shut, thereby preventing oil tanker transit from Arab nations to rest of the world.

Over the weekend, Yemen's Houthi rebels, who have pledged support to Iran, attacked Israel with a barrage of ballistic missiles.

As the gulf war entered day number thirty-one, Trump delivered a strong message on Truth Social today.

Through his post, Trump warned that if Iran continues to block the Strait of Hormuz, U.S. forces will "completely obliterate" all of Iran's electric power plants, oil wells, and possibly all desalination plants and capture Kharg Island.

In the same message, however, Trump affirmed that the U.S. is engaged in serious discussions with a "new, and more reasonable, regime" to bring an end to the U.S.-Israel versus Iran war. He asserted that "great progress" has been made.

In an interview with the Financial Times, Trump stated that Iran does not have any defense to prevent the U.S. from seizing the Kharg Island oil terminal though he acknowledged that a U.S. takeover would warrant a prolonged U.S. presence on that island.

Considered as the "heart of Iran's oil" by energy experts, the Iranian outpost located in the Persian Gulf, off the west coast of Iran, is very vital for Iran's oil exports.

Iran could crumble economically and politically if it fails to defend the strategically significant island.

Iran shrugged of the war-threat and stated it was ready to retaliate strongly.

Hence, analysts are concerned that any operation by the U.S. to confiscate the island would provoke a fierce response from Iran, leading to a protracted war.

While expressing openness to diplomatic talks on the one hand, the U.S. has also sent around 2,500 U.S. marines who are now in the gulf with another similar-sized contingent heading to join soon.

Meanwhile, gulf states reported continued missile and drone attacks from Iran.

Israel hit a petrochemical plant in Tabriz, Iran, and Iranian forces hit an industrial zone in southern Israel.

On the monetary front, any interest rate lowering by the U.S. Federal Reserve now seems to be off the table as the war has stoked concerns of a long-term inflation with oil prices steadily increasing since the start of war.

Speaking at different forums, last Friday, Fed Governor Philip Jefferson, Richmond Federal Reserve President Thomas Barkin, and Fed Governor Michael S. Barr, all echoed a "wait-and-watch approach" because despite Trump's assurance of a quick end to the conflict, the ground-level scenario paints a different picture.