Gold Prices Hold Steady as Iran Deadline Approaches
Gold prices steadied at $4,669.27 on Monday as markets awaited ceasefire talks. Investors are watching a Tuesday deadline to reopen the Strait of Hormuz.
Gold prices steadied on Monday as investors weighed the potential for a diplomatic resolution to the conflict between the United States and Iran. Market participants are closely watching ceasefire negotiations as a deadline to reopen the Strait of Hormuz approaches, which could determine the next direction for safe-haven assets.
Spot gold was little changed at $4,669.27 per ounce by 11:22 a.m. ET, recovering from an earlier 1% drop. Meanwhile, U.S. gold futures gained 0.3% to reach $4,694.50. The market remains on edge as Washington and Tehran discuss a framework to end their five-week-long hostilities, even as Iran resists pressure for a swift reopening of the critical shipping lane.
U.S. President Donald Trump has signaled a firm stance, warning of significant consequences if a deal is not reached by the end of Tuesday. This geopolitical uncertainty is occurring alongside concerns regarding inflation and the future path of interest rates. Bart Melek, global head of commodity strategy at TD Securities, highlighted the risks associated with a prolonged standoff.
If the conflict drags on, oil will grind higher amid tightening supply conditions, adding to inflationary pressures.
Rising energy costs, reflected in the recent performance of Brent Crude Oil, could force the Federal Reserve to maintain a restrictive monetary policy. Higher oil prices typically fuel inflation, leaving central banks with less room to cut rates. Because gold does not pay interest, its appeal often diminishes in a high-interest-rate environment.
Traders are now looking ahead to several key economic updates, including the minutes from the Fed’s March meeting, U.S. Personal Consumption Expenditures (PCE) data, and the Consumer Price Index (CPI). According to the CME FedWatch tool, a majority of market participants currently expect no interest rate cuts from the U.S. central bank this year.
In other precious metals markets, Silver fell 0.9% to $72.32 per ounce, while Platinum declined 0.9% to $1,971.04. Palladium also traded lower, dropping 1.1% to $1,486.03.
