Gold Attempts to Recover After US-Iran Dialogue Progress
Gold prices rose on Monday (June 22nd) after negotiators reported progress in US-Iran talks in Switzerland. This news eased market concerns after US President Donald Trump had previously issued new threats against Iran.
Gold briefly rose as much as 1.6% to reach $4,220 per ounce, erasing last week's losses. At 10:00 a.m. Singapore time, gold was trading up 0.8% at $4,189.23 per ounce.
Sentiment improved after Qatar and Pakistan stated there had been "encouraging progress" in the first round of high-level negotiations. Talks are set to continue throughout this week, raising hopes that an interim US-Iran deal could evolve into a more permanent settlement.
One key outcome of the talks was the establishment of a communication line between Tehran and Washington. This line is intended to ensure the safe passage of commercial vessels through the Strait of Hormuz, one of the most important energy routes for global markets.
Oil fell on Monday as supply continued to flow through Hormuz throughout the weekend. If energy flows remain stable, inflationary pressures from the oil sector could ease and reduce the risk of overly aggressive interest rate hikes from the central bank.
However, gold still faces headwinds from US monetary policy. Fed Chairman Kevin Warsh struck a hawkish tone on inflation at his first policy meeting last week, while the market awaits the US PCE price index on Thursday, which is expected to show accelerating inflation.
The main drivers of this movement are gold strengthening after positive news from US-Iran dialogue, direct Washington-Tehran communication helping to mitigate Hormuz risks, oil prices falling as supply flows continue, hawkish Fed pressure still limiting gold's upside, and US PCE data determining the next direction. Market focus is now on the continuation of Swiss negotiations, security in the Strait of Hormuz, the movement of the US dollar, and the latest US inflation signals. (asd)*
Source: Newsmaker.id
