Gold Soars After Trump's Comments Pull Back Oil Prices

(RTTNews) - Gold prices have surged on Monday following yesterday's comments by U.S. President Donald Trump claiming that the ongoing Middle East war would end "very soon."

Front Month Comex Gold for April delivery has leapt by $133.0 (or 2.61%) to $5,236.70 per troy ounce.

Front Month Comex Silver for April delivery has skyrocketed by $5.515 (or 6.55%) to $89.745 per troy ounce.

The Middle East war entered day number 11 today.

Within days after the combined U.S.-Israel attacks over Iran, the Strait of Hormuz bordering Iran saw a decrease in the number of vessels transiting through it due to concerns of aerial strikes.

With the shipping transit through the Strait of Hormuz blocked, oil exports to the rest of the world were crippled.

Oil-producing Arab nations have subsequently cut back on their production due to storage constraints.

As a result, oil prices went through the roof, triggering concerns of inflation across the world, prompting investors to turn away from risky assets.

In addition, experts viewed that major central banks would embrace a "hawkish" stance in the coming months.

Trump had categorically stated that he would not settle for any agreement with Iran and demanded the unconditional surrender of Iranian forces.

With attention shifting to the U.S. dollar, gold reacted negatively.

While apprehensions of the war prolonging started to grow, yesterday in an interview with reporter Weijia Jiang of CBS News, Trump stated that the U.S. war with Iran would end "very soon."

Trump reportedly asserted that Iran has no navy, communications, or air force and that their missiles are scattering and drones being blown up all over.

Stating that the U.S. is "very far ahead of schedule" in ending the war, Trump reaffirmed that Iran has nothing left in a "military sense."

Though Iran's Foreign Minister Abbas Araghchi stated that Iran would continue the fight as long as it is necessary, Trump's comments were enough to bring back the momentum in stock markets and drag down oil prices.

Trump also warned Iran of "death, fire, and fury" if it continues to block the Strait of Hormuz.

Iran issued a counter-threat challenging it would not allow "one liter of oil" to leave the Middle East until the U.S.-Israel attacks cease.

Iran's Islamic Revolutionary Guards Corps stressed that they would "determine the end of the war."

Earlier reports that the G7 alliance was planning to release crude from their respective strategic reserves after coordinating with the International Energy Administration have not materialized so far. However, the possibility of this surplus oil flowing into the market weighed down on oil prices favoring gold prices.

On the data front, the National Federation of Independent Business' Small Business Optimism Index in the U.S. fell to 98.8 in February from 99.3 in January, below forecasts of 99.7.

According to the U.S. Automatic Data Processing, private employers added an average of 15,500 jobs per week for the four weeks ending February 21, at the same pace from the previous week.

The U.S. dollar index was last seen trading at 98.63, down by 0.23 points or 0.23%.