(RTTNews) - Gold reversed course to edge higher on Monday after reports emerged that the United States and Iran are engaged in indirect negotiations to explore a potential 45-day truce that could lead to a more permanent resolution to the conflict.
Spot gold traded 0.4 percent higher at $4,696.35 an ounce, after having fallen to a low of $4,601 earlier. U.S. gold futures for June delivery were up nearly 1 percent at $4,722.87.
The dollar index pared its early gains amid Iran ceasefire hopes. The foreign ministers of Turkey, Egypt and Pakistan are attempting to broker negotiations between Iran and the United States, according to the Wall Street Journal and Axios.
However, it was said that chances of securing even a partial agreement within the next 48 hours remain uncertain.
The diplomatic push came after U.S. President Donald Trump renewed his threat to attack Iran's bridges and power plants, warning he would bring "Hell" to Iran if they do not open the vital waterway by 8 p.m. Eastern Time on Tuesday.
Tehran condemned Trump's remarks as an "incitement to war crimes" and warned to respond "in kind" to any attacks on its infrastructure.
Describing Thump's threats as a sign of desperation and rage, Iran's President's office said the Strait of Hormuz will be reopened only when all war damages are compensated from transit tolls.
Meanwhile, a surprise drop in U.S. jobless claims amid low layoffs coupled with stronger-than-expected U.S. jobs data released on Friday dampened hopes for Federal Reserve rate cuts this year.
Initial jobless claims were at a seasonally adjusted level of 202,000 in the week ending March 28th, representing a decrease of 9,000 from the previous week's figure and reaching just shy of a two-year low.
The March U.S. employment data showed a strong rebound from February's weak numbers. The U.S. economy added 178,000 jobs in March, well above the consensus estimate of 59,000 while the jobless rate dropped to 4.3 percent from 4.4 percent, driven by a big drop in labor force participation.
The spike in U.S. gasoline prices felt by American consumers will be on full display when key U.S. inflation data is released this week.
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