Gold prices edged lower on Wednesday after reaching a one-month high earlier in the session, as the U.S. dollar regained some strength. Meanwhile, expectations of another round of peace talks between the United States and Iran boosted risk appetite.
Spot gold fell 0.3% to $4,828.07 per ounce at 02:49 GMT, after hitting its highest level since March 18 earlier in the session. U.S. gold futures for June delivery were steady at $4,851.30.
The dollar rebounded from its lowest level in more than a month, making dollar-denominated commodities such as gold more expensive for holders of other currencies.
Oil prices declined while stocks rose on hopes that Iran would resume talks with the United States to end the conflict that led to the closure of the Strait of Hormuz, one of the world’s key shipping routes for crude oil and refined products.
Edward Meir, an analyst at Marex, said gold prices are being driven in the short term by developments in the Middle East, with optimism that Washington and Tehran will begin talks.
Despite the slight decline, gold prices are up 1.6% this week amid renewed hopes for peace negotiations between the United States and Iran.
Meir added, “If things fall apart again, we could return to the pre-ceasefire pattern of lower gold prices, a stronger dollar, and weaker equities.”
U.S. President Donald Trump said on Tuesday that talks to end the war with Iran could resume in Pakistan within the next two days, after the collapse of negotiations earlier in the week prompted Washington to impose a blockade on Iranian ports.
Adding to uncertainty, the U.S. military announced late Tuesday that it had effectively halted all maritime trade into and out of Iran through a naval blockade.
Traders now see a 30% chance of a 25-basis-point U.S. interest rate cut this year, up from around 13% last week. Before the war, expectations pointed to two rate cuts this year.
As for other precious metals, spot silver rose 0.8% to $80.15 per ounce, platinum gained 1.1% to $2,126.14, while palladium slipped 0.1% to $1,585.60.
Reuters
