Gold Prices Hold Steady as Markets Focus on Iran Deal and Central Bank Meetings
Gold prices remained largely unchanged during Asian trading on Tuesday as investors awaited further details on the U.S.-Iran peace agreement while shifting their attention to a busy week of major central bank meetings, led by the Federal Reserve.
Spot gold edged up 0.3% to $4,321.43 as of 13:59 WIB, holding near a one-week high after Monday’s strong rally. Meanwhile, U.S. gold futures slipped 0.2% to $4,343.07.
Bullion surged more than 2% on Monday after Washington and Tehran announced a preliminary agreement aimed at ending their conflict and reopening the Strait of Hormuz. The development eased inflation concerns and weighed on the U.S. dollar, providing support for precious metals.
The proposed peace framework, expected to be formally signed later this week, triggered a sharp decline in oil prices and boosted risk sentiment across global financial markets.
Brent crude fell to a three-month low on Monday, while global equities advanced on expectations that lower energy costs could help ease inflationary pressures.
However, investors remain cautious and are awaiting additional details regarding the implementation timeline of the agreement, as both nations acknowledged that a permanent ceasefire still requires further negotiations.
Market attention is now turning to a series of key central bank policy decisions scheduled for this week.
The Bank of Japan (BOJ) raised its short-term policy rate by 25 basis points to 1.0%, marking its highest level in 31 years. The widely anticipated move is part of the BOJ’s gradual effort to normalize monetary policy and contain inflation.
XAU/USD Outlook
Meanwhile, the Reserve Bank of Australia (RBA) left its benchmark interest rate unchanged at 4.35%, following three consecutive rate hikes.
Traders are now closely watching upcoming policy announcements from the U.S. Federal Reserve and the Bank of England later this week. Particular attention will be given to remarks from Federal Reserve Chair Kevin Warsh for clues regarding the future path of U.S. interest rates.
Higher borrowing costs typically weigh on non-yielding assets such as gold by increasing the opportunity cost of holding the metal. Recent U.S. inflation data and persistent concerns over price pressures have prompted investors to scale back expectations for interest rate cuts this year.
The U.S. Dollar Index rose 0.1% on Tuesday after touching a 10-day low in the previous session.
Among other precious metals, silver fell 0.3% to $69.76 per ounce, while platinum gained 0.2% to $1,776.60 per ounce.
In the base metals market, benchmark copper futures on the London Metal Exchange declined 0.6% to $13,677.33 per metric ton, while U.S. copper futures dropped 0.7% to $6.45 per pound.