Gold Rises to $4,450, Dollar Weakens After Trump Extends Pause on Iran Attacks
Gold prices (XAU/USD) continued their modest gains on Friday (March 27th) and rose above $4,450 ahead of the European session, recovering some of the overnight losses.
Support came from a slightly weaker US dollar after President Donald Trump postponed attacks on Iranian energy infrastructure and extended the deadline for opening the Strait of Hormuz to April 6th, reducing the safe-haven dollar's near-term appeal.
Nevertheless, gold's upside is considered limited. Markets are increasingly confident that major central banks—including the Fed—will maintain a hawkish stance as geopolitical risks keep energy prices high and heighten inflation concerns. Expectations of "higher for longer" interest rates are supporting US bond yields and could further strengthen the dollar, which typically holds back gold's rally as a non-yielding asset.
Uncertainty surrounding the conflict also remains high. Trump has said Iran is "begging" for a deal, while Iranian officials have denied any talks and assess the chances of a deal as slim. The deployment of additional US troops has added to speculation of escalation, keeping geopolitical risks active and potentially supporting the dollar as the global reserve currency—a factor that could potentially limit gold's upside.
Against this fundamental backdrop, market participants are likely awaiting further confirmation before concluding that gold's recovery is more sustainable. After bouncing off a four-month low at the start of the week, gold remains susceptible to fluctuations following the direction of the dollar, yields, and Iran-Hormuz headlines.
Source: Newsmaker.id
