Gold Holds Losses on US-Iran Deadlock

Gold traded near $4,450 an ounce on Thursday after falling for two consecutive sessions, as ongoing uncertainty surrounding US-Iran peace negotiations kept concerns over inflation and prolonged high interest rates firmly in focus. Key disagreements remain unresolved, including Tehran’s insistence on maintaining control of the Strait of Hormuz and preserving its nuclear program. President Donald Trump also reiterated that the US would not agree to what he called a bad deal and rejected easing sanctions on Iran despite Tehran’s demands for financial relief and an end to attacks. Even if both sides move closer to a deal, elevated energy prices are still expected to fuel inflationary pressures and encourage central banks to keep interest rates higher for longer, rather than proceed with the rate cuts. Gold is currently down more than 15% since the conflict began.

Gold prices fell about 2% to around $4,400 an ounce on Wednesday, the lowest level in nearly two months, as declining oil prices helped ease fears of another inflation spike. Developments in the Middle East remained in focus, with traders growing increasingly hopeful that the US and Iran could soon reach an agreement to end the conflict and reopen the Strait of Hormuz. The optimism persisted despite mixed signals from both Washington and Tehran, as well as fresh strikes earlier this week. Iranian state television reported details of an unofficial draft memorandum between Tehran and Washington, under which the two countries would restore traffic flows through the Strait of Hormuz. However, the White House later denied the report. Gold stands nearly 15% below the levels seen at the start of the conflict, as concerns over an energy-driven inflation shock reinforced expectations that major central banks may keep monetary policy tighter for longer.

Gold decreased 2.04% to 4418.26 USD/t.oz