Gold holds biggest jump in two months on Iran peace-deal hopes

Gold experienced its largest increase in two months on Monday (Nov 2) due to optimism surrounding the potential resolution of US-Iran peace talks. This optimism caused a decline in oil prices and reduced concerns about rising inflation. Bullion rose above US$3,950 an ounce, following a 1.9 percent gain in the prior session. The Iranian president announced that his government had been granted greater authority by the supreme leader to negotiate, while US President Donald Trump suggested progress in the talks.

The ongoing Middle East conflict, lasting nine months, has driven up energy prices and inflation, putting pressure on central banks to increase interest rates, which negatively impacts gold as it does not pay interest. In October, gold declined 6.8 percent, breaking below the US$4,000 an ounce mark, reaching a one-year low. Investors were also selling gold to recover losses in the tech sector, as Asian stocks declined further on Tuesday due to a continuing slide in US chipmakers.

Midterm elections in the US are scheduled for Tuesday, which could influence gold prices in Asia on Wednesday.