Gold stocks were brighter again today on hopes that peace talks between the U.S. and Iran could be restarted.
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The VanEck Gold Miners ETF (GDX) was 1.66% higher at $100.42 in mid-trading. Key stock Agnico Eagle Mines (AEM) was up 0.76%, with Newmont Mining (NEM) up 1.49% and Franco Nevada (FNV) up 0.23%.
Spot gold was up 1.36% at $4,813, edging closer to a return to the $5,000 plus level it sat at before the Iran war began in late February.
The gold price was boosted by reports that the US may be open to further talks with Iran after a failure to reach a peace agreement at the weekend. “Hopes are rising that the conflict between the US and Iran is in its end stages, after Iran announced that it would not let vessels pass the Strait of Hormuz in an attempt to keep peace talks with the US live,” said Kathleen Brooks, research director at XTB. “This comes after two Chinese listed vessels challenged the US blockade earlier this morning and passed through the Strait without any attempt by the US to stop them. For now, this is giving hope that the Strait is passable.”
That means a fall in oil prices today and a cooling of fears that subsequent higher inflation would lead to interest rate hikes. The gold price tends to do better in a low interest rate environment.
For gold mining and metal stocks, lower oil prices mean more economic demand.
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