Gold Corrects, Hormuz Signals Ease Risks but Interest Rates Restrain
Gold (XAU/USD) corrected at the start of the week as US-Iran headlines improved market sentiment, despite the failure of weekend talks. At the time of writing, XAU/USD was trading around $4,704, relatively stable today after briefly touching $4,730.
Sentiment improved after an Axios report reported that Iran submitted a new proposal to the US to reopen the Strait of Hormuz and end the war, while moving the nuclear issue to the next stage of negotiations. Washington has not yet responded, but markets believe the diplomatic path remains open as Tehran intensifies efforts to end the conflict.
Meanwhile, US President Donald Trump canceled a planned visit to Islamabad by envoys Jared Kushner and Steve Witkoff, saying Iran had “offered a lot, but not enough.” The dollar also fell following the Axios report, with the DXY down around 0.26% to 98.27, but the dollar's weakness was not enough to fuel a more convincing gold rally.
The main obstacle comes from interest rate expectations. Market attention turns to this weekend's series of major central bank meetings—the Fed, ECB, Bank of England, and Bank of Japan—which are widely expected to hold interest rates, amid a recent oil surge that has reignited inflation concerns and added risks to growth.
In that context, the "higher for longer" narrative remains a burden on gold as a non-yielding asset, even though its role as an inflation hedge and safe haven remains relevant. The next direction will be largely determined by two things: whether there is concrete progress toward opening Hormuz (which could pressure oil prices and ease inflationary pressures) and whether central banks—especially the Fed—signal further tightening of interest rate expectations. (gn)
Source: Newsmaker.id
