Gold soars towards USD 5,600 as Trump rattles sabre over Iran

Gold prices soared to a fresh record near 5600 on Thursday while oil rallied after Donald Trump ramped up geopolitical tensions with his threatened military strike on IranThe surge in safehaven precious metals also saw silver hit another peak and has been helped by a softer dollar sparked by speculation that the US president is happy to see the worlds reserve currency weakenAn uneventful policy announcement by the Federal Reserve did little to inspire buying although observers said traders are optimistic interest rates will come down as Trump prepares to name his pick as the next governorBullion piled on more than 300 at one point to top 5595 after Trump said Tehran needed to negotiate a deal over its nuclear programme which the West believes is aimed at making an atomic bombHopefully Iran will quickly Come to the Table and negotiate a fair and equitable deal NO NUCLEAR WEAPONS one that is good for all parties Time is running out it is truly of the essence he wrote on his Truth Social platformThe next attack will be far worse Dont make that happen again he added referring to US strikes against Iranian targets in JuneA US naval strike group Trump described as an armada led by aircraft carrier the USS Abraham Lincoln is now in Middle East waters with the president saying it was ready willing and able to rapidly fulfill its mission with speed and violence if necessaryCNN said he was mulling an attack after nuclear talks failed to advanceIrans foreign minister Abbas Araghchi warned on Wednesday that Tehran would respond immediately and forcefully to any US military operation adding that its forces have their fingers on the trigger but did not rule out a new nuclear dealInverse of confidenceStephen Innes said the surge in gold indicated deeper structural concernsAfter blowing through 5500 in early Asia bullion is no longer trading like a commodity It is trading like a referendum Not on inflation Not on rates On trust he wroteGold is the inverse of confidence When belief in policy coherence weakens gold ceases to behave like a hedge and instead acts as an alternative That is what we are watching now This is not fear of recession There is doubt about fiat stewardshipRising tensions sent oil prices up more than one percent with WTI at its highest since September and Brent at levels not seen since July amid supply worriesOn equity markets Hong Kong Shanghai Singapore Mumbai and Seoul rose while Tokyo was flatSydney Wellington Taipei and Bangkok droppedLondon and Frankfurt edged up at the open but Paris fellManila sank as data showed the Philippines economy grew last year at its slowest nonpandemic rate since 2011Jakarta tanked eight percent prompting a temporary halt and extending Wednesdays collapse that came after index compiler MSCI called on regulators to look into ownership concerns Stocks later pared those losses to sit around three percent lowerMSCI also said it would hold off adding Indonesian stocks to its indexes or increasing their weighting while there are concerns it could announce a downgrade from emerging market to frontier market which could spark an outflow of foreign capitalI think this sharp downward pressure may last one or two days said Hans Kwee a stock analyst at PasarDana It was yesterday and today at most tomorrow it starts to move sidewaysThen next week the market should be more normalThe dollar remained under pressure even after Treasury Secretary Bessent told CNBC that the US always has a strong dollar policy a day after Trump appeared to welcome its recent weaknessThe Feds policy meeting ended with few surprises as boss Jerome Powell said officials were keeping tabs on dataBut Matthias Scheiber and Rushabh Amin at Allspring Global Investments said attention was now on Trumps choice to take the helm when Powell steps down in MayThe big focus will remain on the announcement of the new Fed chair with the race wide open though a general expectation of someone more dovish to succeed Jerome Powell they wrote in a commentaryHong Konglisted property stocks surged on the back of a report saying Chinese leaders had rowed back on stringent measures aimed at reining in borrowing which helped spark a chronic debt crisis in the countrys real estate sector that is still weighing on the economyTroubled developers soared with Country Garden up around 17 percent Sunac rocketing 30 percent and Agile Group 15 percent higherKey figures at around 0815 GMTTokyo Nikkei 225 FLAT at 5337560 closeHong Kong Hang Seng Index UP 05 percent at 2796809 closeShanghai Composite UP 02 percent at 415798 closeLondon FTSE 100 UP 04 percent at 1018997West Texas Intermediate UP 16 percent at 6424 per barrelBrent North Sea Crude UP 15 percent at 6943 per barrelDollaryen DOWN at 15321 yen from 15338 yen on WednesdayEurodollar UP at 11974 from 11944Pounddollar UP at 13829 from 13797Europound UP at 8658 pence from 8656 penceNew York Dow FLAT at 4901560 closeThis story has been sourced from a third party syndicated feed agencies 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