Gold Rebounds as US-Iran Talks Show Progress, Fed Policy Outlook Remains in Focus
Gold prices advanced on Monday as investors closely monitored developments in US-Iran negotiations in Switzerland while assessing the outlook for US monetary policy following the Federal Reserve's hawkish stance last week.
Spot gold rose 1.1% to $4,205.05 per ounce as of 13:48 WIB, while US Gold Futures gained 1.2% to $4,223.42 per ounce.
The precious metal had declined 1.4% last week and recently recorded three consecutive losing sessions.
Gold found support after Iranian officials reported significant progress in discussions with the United States, easing concerns over prolonged disruptions to global energy supplies and putting pressure on crude oil prices.
Iranian Foreign Minister Abbas Aragchi stated that “major progress” had been achieved during the quadrilateral talks held in Switzerland. Meanwhile, mediators from Qatar and Pakistan indicated that negotiators had agreed on a roadmap toward a broader agreement.
Technical discussions are expected to continue throughout the week.
Lower oil prices helped ease inflation concerns, providing additional support for bullion by reducing expectations that energy-driven price pressures could force the Federal Reserve into a more aggressive tightening cycle.
Brent crude oil pared earlier gains on Monday following signs of diplomatic progress, although tensions surrounding the Strait of Hormuz remain unresolved.
However, gold's upside remains limited by expectations that US interest rates could stay elevated for longer.
Markets continue to digest the outcome of last week's Federal Reserve meeting, where policymakers maintained a hawkish bias and left the door open for additional rate hikes amid persistent inflation risks.
XAU/USD Analysis
Despite ongoing geopolitical uncertainties that should continue to provide underlying support for gold, analysts believe a higher-for-longer US interest rate environment may cap near-term gains.
“While geopolitical risks should continue to offer fundamental support, a higher-for-longer US rate environment could limit upside potential in the near term,” ING analysts said in a research note.
The US Dollar Index remained firm near the 13-month high reached last week, further weighing on gold's momentum.
Investors are now awaiting the release of the US Personal Consumption Expenditures (PCE) Price Index later this week for fresh clues regarding the Federal Reserve's next policy moves.
Among other precious metals, silver climbed 2.8% to $66.70 per ounce, while platinum gained 1.6% to $1,694.60 per ounce.
Meanwhile, benchmark copper futures on the London Metal Exchange edged up 0.8% to $13,700.33 per ton, while US copper futures remained flat at $6.35 per pound.