Quick overview

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Gold fell after US President Donald Trump’s eagerly awaited speech provided little clarity on how to end the Middle East conflict.

Spot gold fell as much as 4.3 percent after Trump stated that the month-long conflict was almost over but that the US would hit Iran “extremely hard” over the next two to three weeks,, ending a four-day winning streak.

The US president urged allies who depend on Middle Eastern oil supplies to find a solution to the impending closure of the Strait of Hormuz, while stating in a prime-time speech that the military operation had nearly met its objectives.

Trump’s speech “basically framed the conflict as a military success story, not a ceasefire announcement. Gold had an impressive run-up to a $4,800 intra-session high.

The momentum may slow after this, given the potential reduction in risk appetite amid concerns about a US ground operation in Iran. Traders had previously wagered that the Federal Reserve might have to cut interest rates because Trump had already stated that the US could leave Iran in two to three weeks.

According to Wong of OCBC, trading will likely be dominated by a desire to reduce holdings before the long weekend, as the market will be closed for the Good Friday holiday. Bullion’s worst monthly performance since October 2008 was a nearly 12 percent decline in March as inflationary risks triggered by high oil prices diminished the possibility of lower borrowing costs, once again outweighing gold’s long-standing appeal as a haven.