Gold Holds Near 4-Week High!
Gold prices (XAU/USD) attracted buying interest during the Asian session's decline on Thursday (April 16), paring most of their decline from the previous session's near four-week peak. This movement occurred as the market continued to assess the possibility of diplomacy regarding Iran, which pressured the US dollar and supported non-yielding assets like gold.
Gold is currently up 0.19% at US$4,833 per ounce after falling 1.1% in the previous session. Market sentiment was driven by US President Donald Trump's statement that the war with Iran could potentially end soon, as well as White House optimism that a deal could be reached. Reports also mentioned the prospect of a second round of US-Iran peace talks within days, which kept risk appetite strong while reducing the safe-haven premium.
On the macro front, easing oil prices—which remain near three-week lows—have helped ease inflation concerns. The US Producer Price Index (PPI) data released this week is also seen as alleviating concerns about the inflationary impact of the war-related energy surge, weakening expectations for the Fed to remain hawkish and supporting gold.
The weakening dollar is a key transmission channel. The dollar index (DXY) is said to have fallen to its lowest level since late February, while markets are starting to reassess the chances of policy easing, with the CME FedWatch putting the end of 2026 as the main window for a potential interest rate cut. The dollar's declining appeal and falling yield expectations increase the room for gold to remain strong.
However, geopolitical risks continue to limit price direction. The US naval blockade of Iranian ports imposed after talks in Islamabad ended without a breakthrough is said to be fully implemented, and Iran has warned it could halt trade in the Gulf region if the blockade is not lifted. Iran is also reportedly demanding a halt to Israeli attacks in Lebanon as a precondition for further talks, while Israeli Prime Minister Benjamin Netanyahu has expressed non-commitment to a ceasefire and ordered the strengthening of a security zone—keeping risks present, supporting the dollar on the defensive and limiting further gold gains. (asd)
Source: Newsmaker.id
