Gold Rebounds on Hopes for a US-Iran Deal
Global gold prices continued their rally on Friday as market participants weighed the latest developments regarding a potential deal between the United States and Iran. Spot gold (XAU/USD) traded around US$4,583 per ounce, rebounding from a two-month low of US$4,366 touched the previous day.
Market sentiment improved after US President Donald Trump stated that the naval blockade would be lifted and confirmed he would hold a meeting in the White House Situation Room to make a final decision regarding Iran. Previously, an Axios report stated that the US and Iran had reached a 60-day memorandum of understanding (MoU) that included extending the ceasefire and reopening the Strait of Hormuz. However, Iranian media outlet Tasnim stated that the agreement was still not final and had not been officially confirmed.
Amid these developments, crude oil prices weakened, with West Texas Intermediate (WTI) hovering around US$85 per barrel and heading for its first monthly decline in five months. However, oil prices remain relatively high compared to before the conflict, so concerns about global inflationary pressures remain a major market concern.
In terms of monetary policy, Federal Reserve officials are maintaining a hawkish tone. Kansas City Fed President Jeff Schmid said the US central bank may need to consider tighter policy to ensure inflation returns to its 2% target. Meanwhile, Philadelphia Fed President Anna Paulson believes inflation remains too high and current interest rates should be maintained pending further economic data developments.
Pressure from these high interest rate expectations is expected to limit gold's short-term gains. The latest US inflation data, reflected in Personal Consumption Expenditure (PCE), also reinforces the view that the Fed will maintain higher interest rates for longer. Market participants are now awaiting further comments from Fed officials and developments in US-Iran negotiations to determine the direction of gold's future movement. (gn)
Source: Newsmaker.id
