Gold Surges as Iran Talk Hopes Knock the U.S. Dollar Lower Again
Gold (XAU/USD) jumped nearly 2% on Tuesday as optimism grew that U.S.-Iran talks could resume, even as the U.S. blockade of the Strait of Hormuz persists and U.S. forces reportedly seized Iran-linked vessels. Spot gold traded around $4,835 after rebounding from an intraday low near $4,742.
Geopolitical headlines continued to dominate market pricing. President Donald Trump hinted that a meeting between Washington and Tehran could take place this week, telling the New York Post that developments could unfold “over the next two days,” which markets interpreted as a sign diplomacy remains on the table.
The U.S. dollar stayed under pressure as traders priced in a potential de-escalation of the conflict. The Dollar Index (DXY) slipped to a six-week low near 97.96 and was down about 0.26% on the session, also weighed by falling oil prices.
WTI crude fell roughly 6.4% to about $91.72 a barrel. The combination of softer oil and a weaker dollar—alongside improved risk appetite—helped underpin demand for dollar-priced assets, supporting bullion’s rebound.
Fed commentary added another layer to the macro backdrop. Chicago Fed President Austan Goolsbee said the central bank may hold rates steady this year and only look toward cuts in 2027 if elevated energy prices from the Iran war slow the return of inflation to the Fed’s 2% target. Fed Governor Stephen Miran, meanwhile, said he expects inflation to be closer to target within a year and sees no reason oil prices should remain persistently high.
Inflation concerns have led investors to trim bets on a more dovish Fed path, with money markets increasingly leaning toward expectations that the Federal Reserve will keep interest rates unchanged through the year, according to Prime Market Terminal.
Source : Newsmaker.id
