Gold Soars As Iran Receives 15-Point-Peace Proposal From U.S.

(RTTNews) - Reversing two days of decline, gold prices surged on Wednesday after the U.S. reportedly sent Iran a 15-point-peace proposal to end the gulf war even while Israel continued its attacks on Iran.

Front Month Comex Gold for April delivery has soared by $144.10 (or 3.27%) to $4,546.10 per troy ounce.

Front Month Comex Silver for April delivery has also surged by $3.406 (or 4.91%) to $72.725 per troy ounce.

The war between U.S. and Israeli forces and Iran entered day number twenty-six today.

On Monday, U.S. President Donald Trump stated that Iran was negotiating with the U.S. and added that he had ordered U.S. forces to halt any strike on Iran for five days. Iran did not confirm his claims though.

Yesterday in the Oval office, Trump announced that Iran had agreed for gas-and-oil-related concessions, worth a "tremendous amount of money." Trump added that Iran wanted a deal very badly.

Iran's media outlets as well as senior parliamentarians in Iran have been rebutting Trump's claims of any behind-the-door negotiations between the countries. However, Trump asserted that the U.S. was talking to the right people.

Since Trump did not disclose any further details, market participants connected this to the opening up of the Strait of Hormuz. The crucial narrow seaway bordering Iran's coast has been blocked since the start of war.

With oil tankers stranded mid-sea, oil prices have been climbing day by day, leading to inflation concerns.

This has forced major global central banks, including the U.S. Federal Reserve, to hold interest rates at the current level.

Reports surfaced yesterday indicating that the discussions would be likely held in Islamabad, Pakistan, with the U.S. Vice-President JD Vance leading the discussions.

Today, the Associated Press stated that Iran has been offered a 15-point peace plan from the U.S. which includes Iran dismantling nuclear facilities in lieu of the U.S. lifting sanctions against Iran's oil exports.

Meanwhile, Israel's military claimed to set off a new wave of strikes on Iran today.

Saudi Arabia and Bahrain intercepted missiles and drones launched by Iran.

Kuwait confirmed a strike on a fuel tank in its major airport which has started a fire.

Earlier, the Pentagon stated it was preparing to send thousands of airborne troops from the U.S. Army's 82nd Airborne Division to the gulf.

Iran's parliamentary speaker Mohammad Bagher Ghalibaf strongly criticized the planned troops deployment in the Middle East by the U.S. forces. Iran also threatened to shut the Bab el-Mandeb Strait and thereby block the Red Sea if there is a ground attack on Iran.

After Iran agreed to allow vessels connected to nations "non-hostile" to Iran to pass through the Strait of Hormuz, oil prices slid further.

WTI crude oil for May delivery was last seen trading at $90.05 a barrel, down by $2.30 (or 2.49%).

As oil slumped, concerns of long-term inflation eased and consequently, gold prices climbed today.

However, gold still trades at 17% below its late-January peak levels, largely due to expectations of a higher interest rate regime in the near-term.

In the U.S., Mortgage Bankers Association's Purchase Index decreased to 163.60 in March 20 from 172.90 in the previous week.

Despite the ongoing attacks and Iran's denial of U.S. claims of ongoing negotiations, oil markets took a breather from Trump's optimistic tone and declined supporting gold prices.