Gold Edges Higher as Iran Deadline Looms

Gold prices stabilized below $4,650 per ounce on Tuesday as the market entered a cautious wait and see mode ahead of President Trump’s 8 p.m. ET deadline. This consolidation follows reports that Iran cut off direct communications with the United States in response to Trump's civilization threats though it continues to engage through mediators regarding a potential ceasefire. While gold traditionally thrives on geopolitical instability its safe haven appeal is currently suppressed by a dominant US dollar and rising Treasury yields fueled by stagflation fears. Although the US launched strikes on military targets at Kharg Island overnight the lack of a sustained rally suggests that investors are pricing in military escalation. Domestic support remains thin as the surge in oil to $116 per barrel reinforces expectations that the Federal Reserve will maintain tight monetary policy. Long term support is anchored by the People’s Bank of China which bought 160,000 ounces in March.

Gold dropped to $4,620 per ounce on Tuesday, wiping out early gains and extending losses for a third straight session. The decline came as escalating Iran-US tensions, marked by President Trump’s ultimatum to Tehran and reports of explosions in Iran, failed to sustain safe-haven demand. Trump warned Iran that its "whole civilization will die" unless a "less radicalized" regime agrees to US terms by 8:00 pm ET, including reopening the Strait of Hormuz and a ceasefire. Iran vowed "beyond-the-region" retaliation if the US crosses its "red lines." Despite the turmoil, gold remains 12% below pre-conflict levels after its worst monthly drop since 2008 in March, as the crisis has strengthened the US dollar and dampened expectations of Federal Reserve rate cuts, further weighing on gold. Meanwhile, China’s central bank provided a rare boost, adding 160,000 troy ounces of gold in March, its largest purchase in over a year.

Gold fluctuated around $4,650 per ounce on Tuesday, caught between cautious gains and losses as markets braced for US President Donald Trump’s ultimatum to Iran later today. The deadline demands Iran reopen the Strait of Hormuz and agree to a ceasefire, or face military retaliation. Yet, despite the looming threat, hostilities have escalated: Tehran reported explosions on Kharg Island and on the Yahya Abad railway bridge in Kashan, while vowing "beyond-the-region" retaliation if the US crosses its "red lines." Despite the geopolitical turmoil, gold remains 12% below its pre-conflict levels after suffering its worst monthly drop since 2008 in March. The Iran crisis has bolstered the US dollar and prompted traders to bet against Federal Reserve rate cuts, undermining gold’s appeal. Meanwhile, China’s central bank offered a rare bright spot, purchasing 160,000 troy ounces of gold in March, its largest addition in over a year, a move that could help shore up investor sentiment.