Gold Rises to US$4,700, Dollar Weakens on Iran Ceasefire Rumors
Gold prices (XAU/USD) strengthened to the US$4,700 area on Monday (April 6), driven by a weakening US dollar after a Bloomberg report citing Axios stated that the US, Iran, and regional mediators were discussing terms for a 45-day ceasefire that could potentially lead to an end to the fighting. The upward momentum also came from buying as prices held around the US$4,600 area, as pressure on the dollar eased the drag on greenback-denominated commodities.
However, gold's upside was limited by the prospect of persistently high global interest rates. Investors believe the surge in energy prices due to the war risks reviving inflationary pressures and prompting major central banks, including the Federal Reserve, to adopt a more hawkish stance. Friday's strong US non-farm payrolls report also reinforced speculation that the Fed will keep interest rates "higher for longer" to combat inflation, a factor that typically hampers the performance of non-yielding assets like gold.
In energy markets, crude oil prices rose to a nearly four-week high after President Donald Trump threatened to target Iranian power plants and bridges if the Strait of Hormuz was not reopened by Tuesday. Tehran also reportedly put forward a new condition: transit through the strategic waterway could resume if a portion of revenue was allocated to compensate for war-related damage. Meanwhile, Ali Akbar Velayati—an adviser to Iran's new supreme leader, Mojtaba Khamenei—warned that the "resistance front" could target the Bab el-Mandeb Strait in the Red Sea, increasing the risk of disruption to global trade routes and keeping energy risk premiums high.
Technically, intraday movements are seen as encouraging the market to wait for confirmation of a sustained decline below US$4,600 before concluding that the rebound from the US$4,100 area—a four-month low in March—is losing steam. The focus next shifts to the release of the US ISM Services PMI in the North American session, amid thin liquidity due to the Easter Monday holiday in many global financial markets.
Source: Newsmaker.id
