Gold Prices Fluctuate Ahead of US-Iran Diplomatic Discussions

Gold Prices Fluctuate as US-Iran Ceasefire Talks Loom

Gold prices have been oscillating between gains and losses as traders weigh the prospects of a fragile ceasefire between the US and Iran, which is set to begin talks this weekend in Pakistan. Bullion is currently trading near $4,755 an ounce, on track for its third consecutive weekly gain, with a 1.6% increase expected for the period.

The fragile ceasefire comes as US President Donald Trump has warned Iran to "better stop" any efforts to charge fees on ships transiting the Strait of Hormuz, a critical waterway that remains a key point of leverage for Iran. Negotiations for a long-term peace deal are set to begin on Saturday in Islamabad.

On the economic front, recent US data has shown that while consumer prices have jumped the most since 2022, core inflation has been relatively tame. This has led to bond yields edging up while the dollar barely moved, with traders continuing to bet on a rate cut this year. Lower interest rates typically benefit gold, as it pays no interest.

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Gold has also been supported by signs that some of the world's largest bullion buyers are continuing to build their stockpiles. Poland's central bank is maintaining a goal to lift reserves to 700 tons, while China took advantage of lower prices to add about 5 tons in March, its largest monthly purchase in over a year. According to ANZ Bank, recent price corrections are expected to motivate more stockpiling, with official central-bank buying for this year expected to be around 850 tons.

As of 4:04 p.m. in New York, spot gold was down 0.3% at $4,753.78 an ounce, while silver rose 1.2% to $76.24 an ounce. The Bloomberg Dollar Spot Index was down 0.1%.

Economic Indicators

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