Trump hints at imminent ceasefire, why is the market more panicked? Safe-haven buying drives gold prices up for the third consecutive time.

The international gold price has shown strong signs of recovery in the recent turbulent fluctuations in geopolitical risks. On Tuesday (March 31) local time, US President Trump hinted in a public statement that military action against Iran was "imminent" and close to ending, immediately attracting high attention from global capital markets. Driven directly by this geopolitical uncertainty, spot gold has risen for three consecutive trading days, with the price rebounding significantly by over $50 after hitting recent lows. As of the close on March 31, the gold price has re-approached the key technical level of $4633 per ounce. It is understood that Trump suggested that the US has basically completed its military objectives and will leave the issue of the Strait of Hormuz to other countries to resolve. Earlier on Tuesday, Iranian President Mahmoud Peseshkian stated that if Iran's demands were met, the country was prepared to end the war. Although the market initially held optimistic expectations that the war might come to an end, Trump's subsequent harsh warning that if Iran did not immediately reopen the Strait of Hormuz, the US military would destroy key oil infrastructures including Khark Island quickly reversed the sentiment. This confrontational diplomacy, coupled with the recent deployment of 3500 additional troops by the US in the Gulf region, significantly increased investors' concerns about the Middle East situation shifting from a full-scale war to a long-term military blockade or even resource looting, leading to a substantial release of safe-haven demand. Market analysis generally believes that Trump's "take the oil" strategy and military threats to crude oil export hubs not only directly pushed up crude oil prices but also strengthened gold's hedge properties through the transmission mechanism of inflation expectations. Investors are worried that if the Strait of Hormuz, a global energy chokepoint, were to be blocked for a long time, the resulting global supply chain disruptions would force the market into safe-haven mode, thereby providing momentum for further upside in gold. Furthermore, despite the recent rebound in gold prices, the nearly 12% decline in gold in March remains the worst monthly performance since October 2008. The Middle East conflict has lasted for five weeks, disrupting global markets and causing energy and other commodity supplies to be blocked, leading to concerns about a simultaneous surge in inflation and economic growth slowdown. Traders are also assessing the statements of the Federal Reserve to find clues to central bank interest rate policies. After Federal Reserve Chairman Jerome Powell stated that long-term inflation expectations remain stable, the focus in the bond market has shifted from rising inflation to the impact of war on economic growth. Yuxuan Tang, Head of Asia Rates and FX Strategy at J.P. Morgan Private Bank, said, "When market narratives shift from inflation risks to growth risks, the safe-haven appeal of gold often re-emerges." She also added, "We believe that the Fed has limited room to raise interest rates in this cycle," and will focus on the tight labor market. As of the time of writing, spot gold rose by 1.21% to $4735.01 per ounce. Silver slightly rose by 0.1% to $75.26 per ounce. Platinum and palladium prices also rose. The Bloomberg Dollar Spot Index, which measures the strength of the US dollar, remained flat at the close after falling by 0.6% in the previous trading day.