Gold surges amid US-Iran deal prospects

Today’s headlines

What’s happening: Gold prices traded higher this morning as investors monitored the latest developments related to the US-Iran conflict.

What happened: Rising optimism around a deal between the US and Iran eased concerns over inflation and interest rate hikes by central banks.

Weakness in the US dollar lent further support to gold prices during the session.

Why it matters: Over the weekend, US President Donald Trump said that a peace agreement with Iran had been “largely negotiated.”

Washington said it had agreed to release some frozen Iranian assets, while Tehran is expected to reopen the Strait of Hormuz. The two countries would continue their talks of curbing Iran’s nuclear program.

Trump said that the US blockade of the Strait of Hormuz would remain in place until a formal deal is signed between both the countries.

Kevin Warsh was named as the Chairman of the Federal Reserve on Friday, at a time when higher energy prices due to the US-Iran conflict have triggered inflation concerns and are weighing on consumer sentiment.

Weakness in the US dollar provided a further boost to gold prices, as a softer greenback makes metals cheaper for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell more than 0.2% to 99.01 this morning.

Spot price for gold rose around 1.3% to $4,565.66 an ounce this morning. Despite the rebound this morning, gold remains almost 13% lower since the start of the US-Iran conflict.

In other metals trading, spot price for silver surged 3.1% to $77.8810 an ounce, platinum prices gained 2.3% to $1,970.34 and palladium rose 2.5% to $1,385.87.

What to watch: Investors will continue monitoring the progress in negotiations between the US and Iran.

Data on Chicago Fed National Activity Index, S&P/Case-Shiller home price and CB consumer confidence will be released on Tuesday. The Chicago Fed National Activity Index, which fell to -0.20 in March from +0.03 in the previous month, is expected to decline further to -0.30 in April. Analysts expect the S&P Cotality Case-Shiller home price index to surge by 1% year-over-year in March following a 0.9% gain in February. The FHFA house price index, which came in unchanged in February, is expected to rise by 0.1% in March.

The markets today

The Singapore dollar in focus today ahead of industrial production data

Context: The Singapore dollar gained versus the US dollar this morning as investors digested the latest economic reports.

Details: Data released this morning showed that Singapore’s current account surplus rose to S$41.09 billion in the first quarter from S$32.72 billion in the year-ago period. The latest reading represented the largest surplus on record since the series started in 1986, as the goods account surplus widened to S$58.22 billion from S$48.93 billion in the year-ago period amid a surge in exports.

Singapore’s economy grew by 6.0% year-over-year in the first quarter, higher than a preliminary reading of 4.6% and accelerating from 5.0% in the previous quarter. It signalled the strongest annual expansion since the third quarter of 2024 and was driven by a gain in construction output. On a quarterly basis, the region’s economy expanded by 1.0%, recording a second consecutive quarterly rise.

Singapore kept its GDP growth outlook for 2026 unchanged at 2.0%-4.0%, while indicating that the forecast could be revised in case global and domestic conditions worsen.

Weakness in the US dollar lent further support to the Singapore’s currency. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell more than 0.2% to 99.01 this morning.

The USD/SGD pair fell more than 0.2% to 1.2765 this morning, while the STI Index climbed over 0.5% to trade at 5,095.74.

What to watch: Investors will continue monitoring developments related to the US-Iran conflict.

Data on industrial production from Singapore (0900 UAE Time) will be released on Tuesday. Industrial production in Singapore, which surged 4.7% in March, is expected to decline by 0.5% in April.

Other Markets: US trading indices closed higher on Friday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 0.58%, 0.37% and 0.42%, respectively.

The news shaping the markets

Ukraine formally demanded an emergency meeting of the United Nations Security Council (UNSC) after Russia hit Kyiv with hypersonic ballistic missiles. The news sent the USD/RUB pair higher in forex trading this morning.

Chile’s producer prices surged 17.7% year-over-year in April. This being an acceleration from the 14.8% gain in the previous month lent support to the USD/CLP forex pair.

Canada’s retail sales grew by 0.6% in April. This being the fourth straight month of gain sent the USD/CAD pair lower in forex trading this morning.

Mexico’s economic activity climbed 1.4% year-over-year in March, recovering from a 0.3% decline in the previous month. The latest reading topping market expectations of a 0.5% gain exerted pressure on the USD/MXN forex pair.

China’s foreign direct investment declined 10.3% year-over-year to ¥287.7 billion during the first four months of the year. However, the USD/CNY pair fell in forex trading this morning.

What else to watch today

Brazil’s current account (1530 UAE Time) and foreign direct investment (1530 UAE Time), Mexico’s balance of trade (1600 UAE Time), Canada’s wholesale sales (1630 UAE Time) as well as Mexico’s current account (1900 UAE Time).