The price of gold (TVC: $GOLD) is up 1% ‌on May 25 as optimism for a breakthrough in U.S.-Iran peace negotiations weakens the American dollar and sends oil prices down 5%.
Spot gold was trading at $4,559.07 U.S. per ounce early in the day on hopes that the Strait of Hormuz waterway will soon reopen to commercial oil shipments.
Over the weekend, the administration of U.S. President Donald Trump said they had negotiated a peace deal that will reopen the Strait of Hormuz, where 20% of the world’s oil is shipped.
That news has sent oil prices tumbling, with Brent crude falling below $100 U.S. per barrel. At the same time, the U.S. dollar is at its lowest level in a week.
Gold has struggled since war broke out between the U.S, Israel and Iran on Feb. 28. Higher oil and gas prices raised fears of elevated inflation that could keep interest rates higher for longer.
As a non-yielding asset, ​gold performs better when interest rates are lower. It also does better when the U.S. dollar, a competing store of value, moves downward.
The spot price of silver is also on the march higher. Silver is up 3% to $77.79 U.S. per ounce on May 25 as the entire metals market rises.
