Gold Weakens Amid Conflicting Diplomatic Signals
Gold prices fell below $4,500/oz on Thursday (March 26), paring some of the previous session's gains, as conflicting statements from the United States and Iran regarding the possibility of peace talks further rattled market sentiment.
Washington maintains that negotiations are ongoing. The Trump administration reportedly sent a 15-point proposal to Iran via Pakistan, aimed at de-escalating the conflict and encouraging the reopening of the Strait of Hormuz—a strategic route for global energy trade.
However, Iran has asserted it has no intention of holding talks with the US and has stated it will reject Washington's ceasefire offer. Tehran has instead put forward its own conditions, including a demand for recognition of Iran's sovereign control over the Strait of Hormuz.
Meanwhile, the US has also ordered the deployment of thousands of additional personnel to the Middle East, raising market concerns about the possibility of further escalation—including the risk of a ground operation. The combination of uncertain diplomacy and troop buildup has kept the market headline-driven.
Throughout the month, gold has also faced strong selling pressure as surging energy prices due to supply disruptions from the Iran war fueled inflation concerns. These conditions have led the market to believe that major central banks will adopt a more hawkish stance or hold interest rates for longer, which typically puts pressure on non-yielding assets like gold.
Newsmaker's bottom line: Gold has corrected because the market hasn't seen any concrete evidence of de-escalation. As long as the status of talks remains unclear and the risk of energy inflation remains high, gold's movement has the potential to remain volatile and highly dependent on headlines.
Source: Newsmaker.id
