Gold Remains Stable Amid Continued US-Iran Tensions and Lingering Rate Hike Uncertainty

Global Economic Uncertainty Keeps Gold Prices in a Narrow Range

Gold prices have been trading in a narrow range as conflicting signals on the progress of US-Iran ceasefire talks continue to keep traders guessing. The price of bullion was around $4,542 an ounce, little changed from a week earlier. The conflicting signals emanating from Tehran and the US have left it unclear if the two sides are any closer to a deal.

According to reports, Tehran is in the process of responding to a text submitted by the US, which has narrowed the gaps to some extent. However, a Reuters report that Supreme Leader Mojtaba Khamenei issued a directive that the country's near-weapons-grade uranium should not be sent abroad initially sent oil prices higher. This directive also raised concerns among traders that the Federal Reserve and other central banks may have to hike interest rates to combat inflation fueled by rising energy costs.

The Impact on Gold

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Bullion typically performs well in a lower rate environment, since the metal pays no interest. The precious metal has traded in a tight range since falling sharply in the early days of the conflict, as investors weigh higher rates against the prospect of a high-inflation, low-growth scenario. Bullion is down nearly 14% since the war erupted in late February.

Current Market Conditions

Spot gold was little changed at $4,542.64 an ounce at 6:16 a.m. in Singapore. Silver was up 0.1% to $76.73. The Bloomberg Dollar Spot Index, a gauge of the US currency, ended the previous session steady.

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