Gold Eases from Monthly Peak as Dollar Firms, Iran Talks Temper Safe-Haven Demand
New Delhi — Gold prices edged lower on Wednesday after touching a one-month high, pressured by a firmer US dollar and improving risk appetite as prospects for renewed US-Iran peace talks weighed on demand for safe-haven assets.
Spot gold fell 0.3% to $4,828.07 per ounce, after earlier reaching its highest level since March 18. US gold futures for June delivery were little changed at $4,851.30.
The dollar rebounded from a more than one-month low, making dollar-denominated commodities such as bullion more expensive for holders of other currencies, thereby dampening demand.
Market sentiment improved after Donald Trump said talks with Iran could resume in Pakistan within days, following the collapse of negotiations over the weekend and Washington’s subsequent blockade of Iranian ports.
The easing of geopolitical tensions also pushed oil prices lower and lifted global equities, further reducing the appeal of gold as a defensive asset. Analysts said the metal remained sensitive to developments in the Middle East conflict.
“Gold prices are reacting to the Middle East headlines in the short term with hopes that the two countries will engage in talks,” said Marex analyst Edward Meir, adding that any breakdown in diplomacy could reverse current trends.Despite the pullback, gold is still up about 1.6% this week, supported by earlier uncertainty surrounding the conflict and disruptions to oil flows through the Strait of Hormuz.
Expectations for US monetary policy have also shifted. Traders now price in a roughly 30% chance of a 25-basis-point interest rate cut this year, compared with about 13% a week earlier, reflecting changing views on inflation and growth amid geopolitical volatility.
Other precious metals moved higher, with silver rising 0.8% to $80.15 per ounce and platinum gaining 1.1%, while palladium edged slightly lower.
