Gold Edges Higher as More US-Iran Talks Eyed

Gold climbed to around $4,760 per ounce on Tuesday, rebounding from the previous session’s losses as the US and Iran signaled willingness to resume negotiations aimed at securing a longer-term ceasefire before the current two-week truce lapses. President Donald Trump said Tehran had reached out to Washington just hours after the US initiated a naval blockade on Iranian oil shipments in the Strait of Hormuz. Iranian President Masoud Pezeshkian also indicated readiness to continue peace discussions, provided they remain within the framework of international law and regulations. Oil prices retreated on hopes for a potential longer-term deal, easing inflationary concerns and tempering expectations that central banks will keep interest rates on hold or even hike them. Despite the uptick, gold is still down roughly 10% since the conflict began.

Gold dropped toward $4,700 an ounce on Monday, paring gains from last week as US plans to blockade the Strait of Hormuz following failed weekend talks with Iran heightened concerns over a worsening global energy crisis. The restrictions will apply only to vessels entering or leaving Iranian ports starting at 10 a.m. Eastern Time. Negotiations in Pakistan failed to produce an agreement, with the US accusing Tehran of refusing to curb its nuclear ambitions, while Iran reportedly sought control of the strait, war reparations, a regional ceasefire, and access to frozen overseas assets. The effective shutdown of the critical shipping route has driven energy prices sharply higher and intensified inflation risks, reinforcing expectations that central banks may delay rate cuts or even tighten policy further. This dynamic has weighed on gold, leaving it down more than 10% since the conflict began.

Gold edged up to $4,780 per ounce on Friday, heading for a third straight weekly gain, buoyed by a weaker dollar and investor focus on US-Iran diplomatic talks in Islamabad this weekend. The metal gained 2% this week as expectations of earlier US rate cuts boosted non-yielding assets, while a two-week ceasefire eased oil prices and inflation concerns. However, the fragile truce showed signs of strain on Friday, as Israeli strikes on Lebanon and ongoing disruptions in the Strait of Hormuz threatened to complicate negotiations. Meanwhile, the latest US CPI report, the first since the conflict began, revealed inflation climbing to 3.3%, the highest since May 2024, with the monthly index surging 0.9%, the steepest rise since mid-2022. Markets now price in a 30% chance of at least a 25-basis-point rate cut in December. In physical markets, gold demand in India ticked up ahead of a key festival, while premiums in China narrowed as retail demand softened.