Market News

(Bloomberg) -- Gold rose slightly as investors assessed mixed signals about the possibility of a US-Iran ceasefire deal, while also weighing the odds that elevated energy prices will prompt central banks to keep interest rates higher for longer.

Bullion gave up some of its earlier increase to trade about 0.5% higher. President Donald Trump said he called off plans to attack Iran on Tuesday because “serious negotiations are now taking place” on reaching an agreement. Earlier the White House said a proposal delivered by Iran through Pakistani mediators on Sunday lacked meaningful improvement, Axios reported. According to reports from Tasnim, Iran said US demands were still excessive and that it would not agree to end the war at the expense of its nuclear program.

Gold has traded in a narrow range since falling sharply in the early days of the war as investors assess inflation risks that could keep rates higher, a negative for non-yielding bullion. Still, economic growth concerns could prompt monetary easing as the conflict drags on. Gold is down more than 13% since the war started.

New investment interest in precious metals “has dried to a trickle” on worries over higher interest rates, analysts including Gregory Shearer at JPMorgan Chase & Co wrote in a note to clients. A resolution to the conflict is key to reviving demand, they said, although the market is likely to find support from central bank purchases.

ETFs Holdings

Jane Street Group LLC slashed its exposure to iShares Silver Trust (SLV) — the world’s largest silver exchange-traded fund — in the first quarter, with its holdings down 11.8 million shares by the end of March, according to data compiled by Bloomberg from its 13F filing. It’s unclear if it was done on behalf of its clients or for its own proprietary trading. Citadel Advisors LLC added 2.2 million shares of SLV in the first quarter.

Jane Street’s holdings in SPDR Gold Shares (GLD) — the world’s largest gold ETF - slipped by 867,074 shares during the January-March period. Citadel’s holdings in GLD tumbled by 1.5 million shares over the same timeframe, according to data compiled by Bloomberg from its 13F filing. Virtu Financial LLC sold all of its holdings in GLD, unloading nearly 1.2 million shares.