Strong price gains in gold, silver on safe-haven demand
NEW YORK (March 2) Gold and silver prices are sharply higher and hit four-week highs in early U.S. trading Monday, on strong safe-haven demand as the Middle East is seeing its biggest war in decades. April gold was last up $159.40 at $5,406.80. March silver prices were up $2.038 at $94.71.
Latest on the U.S.-Israeli war against Iran…
-- U.S.-Israeli strikes across the Middle East continue. Iran’s supreme leader killed.
--Global stocks fell today, crude oil rallied, the U.S. dollar and gold advanced.
--Kuwait said a number of U.S. fighter jets crashed. Crew members survived.--Iran claims it shot down a U.S. fighter jet.--Saudi Aramco halted its largest oil refinery after a nearby drone strike.--Iran won’t negotiate with the U.S., security chief says.--Israel bombed Beirut after Hezbollah group fired rockets and drones into Israel. --Trump: U.S. military campaign in Iran could last several weeks but is ahead of schedule.--Dozens of oil tankers are stranded in the Persian Gulf as Strait of Hormuz all but closed off.
Marketplace adjusts interest rates outlook amid U.S.-Iran war. Money markets scaled back wagers on interest-rate cuts in the U.S., U.K. and Euro zone Monday as war in the Middle East sent oil prices spiking higher and fanned inflation fears. “The chance of the Federal Reserve reducing borrowing costs three times in 2026 has dropped to 20% from almost 50% last week, according to swaps tied to policy-meeting dates. Traders no longer expect the Bank of England to deliver three reductions this year and have lowered the probability of a cut in March to 60% from more than 80%. They have halved the odds of a European Central Bank rate cut this year, pricing just five basis points,” said a Bloomberg report. “U.S., U.K. and German two-year yields — which are among the most sensitive to changes in monetary policy — have risen more than longer maturities. That reflects a sharp jump in inflation gauges,” said the report.
U.S. military action in Iran may threaten Trump-Xi summit in April. “One month before Chinese President Xi Jinping and President Trump are set to convene at a much-touted summit in China, the U.S. leader’s toppling of another friend of China risks stoking tensions between the world’s biggest economies,” Bloomberg reported Sunday. After U.S. and Israeli military strikes on Iran wiped out the Islamic Republic’s Supreme Leader, Chinese Foreign Minister Wang Yi on Sunday called it “unacceptable to openly kill the leader of a sovereign country and institute regime change.” Speaking by phone with his Russian counterpart, Wang warned that the U.S. president risked driving the Middle East into the “abyss.” Condemnation of Washington from China’s top diplomat stands out during a delicate period when officials on both sides are trying to steady relations before Trump arrives in Beijing on March 31. “Complicating that task, (Trump) has ousted two leaders with ties to Beijing in quick succession this year, after the U.S. in January snatched Venezuela’s Nicolás Maduro,” said the report.
OPEC+ to raise crude oil output amid Middle East tensions. OPEC+ agreed to resume oil production increases at a slightly accelerated pace as a conflict sparked by U.S.-Israeli strikes on Iran threatened to bolster a rally in crude prices. Key members led by Saudi Arabia and Russia will add 206,000 barrels a day starting in April, according to a cartel statement after their monthly video conference on Sunday. The hike is unlikely to calm markets, as several OPEC+ producers have limited capacity to increase and key Gulf members could face the risk of export constraints if there are prolonged disruptions in the critical Strait of Hormuz.
The key outside markets today see the U.S. dollar index solidly up and hitting a five-week high, with crude oil prices sharply higher, hitting an eight-month high and trading around $72.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 3.96 percent.
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