MARKET NEWS

(Bloomberg) -- Gold held gains, as the US and Iran prepared to sign an interim peace deal that may ease global inflationary pressures arising from the war.

Bullion was near $4,325 an ounce, after advancing more than 6% over the past four sessions. Financial details of the US-Iran agreement are emerging, including that the Islamic Republic would be allowed to sell its oil immediately and get eventual access to its frozen assets.

US President Donald Trump has promised the Strait of Hormuz can fully re-open by Friday, though some European allies remained wary of potential risks. Opening up the waterway would alleviate an energy supply crisis that has sent inflation soaring and prompted many central banks to keep rates on hold or even hike them — moves that are negative for non-yielding bullion.

Attention was shifting to the first Federal Reserve policy decision under new chairman Kevin Warsh later on Wednesday, as investors looked for clues on how he may handle the inflation risk. Market expectations are for rates to be kept on hold.

“Gold’s firming correlation with real yields shows focus has shifted to” the upcoming Fed meeting, analysts from Standard Chartered Plc, including Emily Ashford, said in a note. While the prospective US-Iran pact “bodes well for gold finding a price floor sooner rather than later,” prices are likely to be volatile given the precious metal dipped below its 200-day moving average earlier this month.

Gold edged down 0.1% to $4,324.76 an ounce as of 12:52 p.m. Singapore time. Silver was flat at $70, after rising 10% over the past four sessions. Platinum and palladium declined. The Bloomberg Dollar Spot Index, a gauge of the dollar, was 0.1% lower.