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

Gold experienced its largest surge in two months on Monday, driven by optimism surrounding potential progress in US-Iran peace negotiations. The precious metal climbed 1.9 percent, trading around $3,950 per ounce. This increase came after a 7 percent drop in oil prices, amid reports from Iran's president of increased authority granted for peace talks, and hints from US President Donald Trump of progress in the discussions.

The ongoing conflict in the Middle East, now in its ninth month, has contributed to surging energy prices and inflation, which have put pressure on central banks to raise borrowing costs. As gold doesn't yield interest, it has become less attractive, leading to a 6.8 percent decline in its value in October. The metal broke below the $4,000 threshold at the end of the month, reaching a one-year low.

Additionally, gold's performance has been impacted by a shift away from artificial intelligence, causing investors to sell off bullion holdings to recover from losses in other areas.

Currently, investors are closely monitoring the outcome of the US midterm elections on Tuesday, as the election's influence on the fiscal narrative could indirectly affect gold prices. Wealth manager Noah Holdings Ltd. highlighted that the precious metal's sensitivity to US Treasury interventions, government debt reliance, and the Federal Reserve's capacity to maintain short-term interest rates is vital in determining its price movements.